In what one website is calling a data witch hunt, AT&T is reaching out and touching some unlimited data plan customers the company suspects of “tethering” — the practice of sharing your smartphone data plan with other devices such as a laptop, iPad, or even home computer.

Just a short time ago, Stop the Cap! reported AT&T was tracking down “heavy users” that were using over 10GB of wireless usage per month.  But now it appears AT&T is starting to contact customers using less — as little as 5GB, warning them they must sign up for a tethering plan if they intend on tethering their phones.  Only many getting the warnings are not tethering at all.  Modmyi, which has an active forum discussing the subject, reports their latest findings:

The first round appeared to be users on AT&T unlimited data plans that used more than 10GB of data in March. The latest round appears to be similar users using more than 5GB in March. It appears AT&T is on a data witch hunt. We’ve seen the message sent to users who simply use a lot of bandwidth (and never even tether/jailbreak) as well as users that use unauthorized tethering.

What’s most shocking is that many users have reported calling AT&T and were asked if they were using Netflix, Pandora, etc. Some have been told that using those services is the definition of tethering. We’re not sure if this is coming down from the AT&T top, or if this is simply non-technical AT&T customer service reps that are confused about what tethering is. However, based on the number of user reports, and the chances that users are very likely reaching different reps, this seems like deliberate AT&T rep training. Seemingly unethically, many customers are being convinced to pay for a tethering plan when they’re in fact not tethering at all.

AT&T has sought to monetize data usage across all of their networks, first imposing a 2GB usage cap on their wireless customers and now plans a 150-250GB cap on their wired broadband services.

Visions of higher broadband bills for consumers... complete with usage limits.

In our continuing campaign to call out shallow analysis of Internet Overcharging, we present today’s latest example from Strategy Analytics.

This group, which claims to be “a leading expert on telecommunications tariffs research and analysis” for OECD and EU operators and regulators offered this gem: (underlining ours)

As and when these caps come into force, users will doubtless complain – much as they did with mobile broadband caps. Some will worry about overage charges, while others will bemoan the fact that the caps are set so high that they are paying for bandwidth they simply won’t use (which is kind of ironic, if they have come from a world where they were paying for unlimited usage). From a provider perspective, it is very much a case of damned if you do, damned if you don’t. The ‘trick’ for them is to strike the right balance between fairness – if you use, you pay – and simplicity/transparency, by not creating too many layers around broadband pricing.

We can probably expect to see providers follow AT&T’s lead in fixed broadband pricing. But before the critics start on the inevitable tirade against them, it is worth remembering that genuine flat rate pricing across comms services is not as prevalent as we would all like to believe – a closer look at service terms and conditions will reveal that.

The “critics” Strategy Analytics wants to lecture are consumers.

In nearly three years of covering Internet Overcharging schemes as our main focus of interest, we have never… we repeat never, heard of anyone complaining their home broadband provider delivered ‘too much’ usage allowance.  In fact, consumers who complain about broadband pricing point to relentless rate increases, particularly when they come on top of usage limits and/or speed throttles.

The only “strategy” on offer from this group is an apparent interest in raising consumer broadband bills with price tricks.  The ultimate in simplicity and transparency is today’s enormously profitable unlimited use broadband service that has raked in billions in profits for cable and phone companies.  Consumers need not think twice about every website they visit, providers don’t have to deal with billing confusion, customers are given the opportunity to buy faster speed tiers at a premium price that actually delivers value without restricted use provisions.

The group also claims unlimited broadband is not as ubiquitous as we might believe, hinting use restrictions can be found in Acceptable Use Policies.  The truth is, those restrictions which allow a provider to control traffic that proves harmful to the network (bot attacks, hacking, and viruses) or other customers (spam bombs, commercial use of residential accounts, running a server) have always been a part of Acceptable Use Policies since phone and cable companies started selling service.  Most providers responsibly enforce these provisions not as a backdoor usage cap, but to prevent activities that clearly create demonstrable problems for the provider or other customers.  Few consumers object to them.

It's "Return of the Astroturf Groups"

It did not take more than a few hours for the first non-profit and “minority advocacy” groups to hurry out press releases applauding the announced merger intentions of AT&T and T-Mobile.

Winning approval of the merger in Washington will take a full court press by lobbyists and organizations that claim to represent “the public interest,” even if the merger will likely raise prices for the constituents they ostensibly represent.  Too often, these groups also fail to openly disclose they have board members that work for the telecommunications industry or welcome large financial contributions made by one or both companies.  That makes it difficult for the average consumer to discern whether matters of arcane telecommunications policy are truly of interest to these organizations or whether they are simply returning a favor to the companies that write them checks.

The Communications Workers of America, the union representing many AT&T employees, has been applauding the announced merger on their website, “Speed Matters.”  It’s hard to blame the union for supporting the merger — it opens the door to union membership for T-Mobile employees.  The union does a good job representing their workers, and their interests often are shared by consumers.  For instance, the CWA has smartly opposed Verizon landline sell-0ffs to third party companies, which have tended to bring bad results for ratepayers.  But their website does trumpet some sketchy organizations not well known outside of the dollar-a-holler advocacy industry.

Take “The Hispanic Institute” (THI).  This obscure “group” chose a name for itself suspiciously similar to the much larger and more prominent National Hispanic Institute.  That’s where the similarity ends, however.

The Hispanic Institute believes the AT&T and T-Mobile merger will bring harmony and joy to the Latino community clamoring for mobile broadband:

“The proposed merger of AT&T and T-Mobile will move us closer to universal mobile broadband deployment. When we consider how essential mobile technology is to empowering communities, we conclude that this proposal is good for Hispanic America. It provides an opportunity to amplify the growth in mobile broadband adoption by both English and Spanish speaking Americans.”

AT&T regularly contributes substantially to Urban League programs.

In fact, the only thing most Latinos will find after the merger is higher prices for reduced levels of service.  T-Mobile’s aggressive pricing and innovative (and sometimes disruptive) packages are well-known in the industry, and they are a frequent choice of budget-minded consumers, including many members of the Latino community.  It does little good to expand mobile broadband service that many cannot afford.  Reduced competition always leads to higher prices, a fact of life missed by THI.

Perhaps THI’s misguided support for the merger was an aberration.  But then again, maybe not.  The group also promotes a pharmaceutical industry-funded scare site designed to convince Americans that prescription drugs imported from Canada are dangerous and unsafe.  Calgary is apparently the new Calcutta, when you have a vested interest in stopping people from saving a fortune on their medication by buying it north of the border.

Perhaps that was also just “an error in judgment.”  But little doubt remains after you read their spirited defense of the bottom-feeding payday loan industry (even though they claim they are not.)

Friends of Big Pharma, Payday Loan Gougers, and A Bigger AT&T are no friends of mine… or yours.

The Urban League is a regular recipient of AT&T cash.  In return, the group is no stranger to advocating for the phone company’s political agenda.  One of their chapters belongs to the ultimate in Astroturf groups — Broadband for America.  How many organizations cautiously optimistic about a telecom industry merger would rush out a press release about it?  They did:

“The pending merger of AT&T and T-Mobile USA holds potential opportunity for an expanded, diverse workforce … We plan to carefully observe the upcoming regulatory process and look forward to a transition that is guided by AT&T’s commitment to diversity and equal opportunity. We have every reason to be optimistic,” said Marc Morial, president and CEO.

Speed Matters somehow forgot to mention AT&T is a major member of the Alliance they quote in support of the merger.

Of course he does.

Then there is the ultimate in echo chamber advocacy courtesy of the Alliance for Digital Equality:

“The merger of T-Mobile USA and AT&T will enable rapid broadband coverage for most of the nation — including many lower-income and rural communities that have been largely underserved — through an expanded 4G LTE deployment to 95% of the U.S. population within six years. This is a huge step forward in making President Obama’s vision of reaching 98% of Americans a reality.

“What’s more, wireless broadband has shown tremendous promise in bringing our communities of color into the digital age — something that an increasing number of studies and reports have shown we have got to improve upon if we are going to bridge the digital divide that exists in this country. This merger puts the right technologies into the communities that need it, at the right time… and at the right price.” — Julius Hollis, Chief Executive Officer

Missing from these glowing words is an admission that AT&T is a major member of the Alliance.

It’s the coalition of the willing to sell out consumers.

[Important Update — 7:53am ET 4/7 — Because of a technicality, it is important for everyone to reference H.129 when calling your state senators.  Members of the Senate Finance Committee are still evaluating the House version of the bill — H.129, so senators will more readily identify the bill we are opposing when we reference the House version (and not S.87).  You can also call it the “Level Playing Field” bill, but with disgust.  Include the fact you found the name highly ironic, since the only thing it will “level” are the state’s community broadband networks — right to the ground.  If you already called, why not just send a follow-up e-mail opposing H.129.]

Stop the Cap! has learned lobbyists for North Carolina’s cable and phone companies are growing concerned over increasing opposition to their custom-written duopoly protection bill that will ruin community broadband developments across the state and threaten ones already up and running.  Now they’re in a mad dash to push S.87 (the Senate version of H.129) through the Senate Tuesday before you have a chance to call and express outrage over this corporate protectionism.

Our sources tell us the bill has been yanked from the Senate Commerce Committee and is moving faster than North Carolina’s cable and DSL broadband to the Finance Committee, where bill sponsors hope for a quick voice vote and no public comment allowed.

The engineer of the legislative railroad in the Senate is Sen. Tom Apodaca (R) who serves the western North Carolina counties of Buncombe, Henderson, and Polk — areas with broadband challenges of their own.  Apodaca’s lead role pushing an anti-broadband bill is ironic considering his campaign website lists his priorities as:

• “Great schools for our children.” Western N.C. residents without broadband service at home are forced to resort to sitting in their cars in school parking lots or spend hours at overburdened public libraries to access Wi-Fi networks to complete homework assignments.  Great schools in a digital economy require great broadband – both in school and at home
• “Better paying jobs.” Digital economy jobs are always in demand and bring good salaries.  But those with inadequate broadband will find the kind of entrepreneurial experience and independent study required to excel in these fields hampered by satellite fraudband service or dial-up that limits possibilities and leaves North Carolina behind.
• “Let people keep more of the money they earn.” It’s a great idea, and competition for big cable and phone companies guarantees it.  In Wilson, consumers don’t face annual rate hikes for their cable service.  Can your community say that?  When their network is paid off, Wilson’s GreenLight will start paying off for local residents as well, keeping money in the community.
• “And access to quality health care.” As Google intends to prove in Kansas City, Kansas — great health care and excellent broadband go hand-in-hand to deliver better patient outcomes at a cheaper price.  Every health care provider wants faster broadband to increase efficiency and reduce costs and medical care errors.  S.87 delivers the equivalent of just another metal filing cabinet and fax machine to the back office.  Allowing communities to build fiber broadband changes everything.

What has proven so perplexing to consumers across the state is how a bill written by and for the cable and phone companies that does not deliver a single new broadband connection is getting such love and care from a legislature that is supposed to represent the interests of voters, not multi-billion dollar out of state corporations.  It confuses some of America’s high tech companies as well, including Google, Alcatel-Lucent, and Intel.  They’ve all signed a joint letter opposing H.129/S.87.

In fact, one of the reasons Google picked Kansas City, Kansas for its 1Gbps network is the friendly working relationship it has established with local utilities, which are all owned by the community of Kansas City.  It no doubt speaks volumes to Google that the North Carolina legislature would rather be at war with their towns and cities for the benefit of Time Warner Cable, AT&T and CenturyLink, than allowing communities to build their own broadband networks.  At a time when the FCC has ranked North Carolina worst in the nation, members of the Senate are being asked to guarantee that will remain so for years to come.

So What Should I Do?

Get on the phone -and- e-mail your state senator and demand a NO vote on S.87. If you are shy, you can call before or after business hours and leave a message on their voicemail. It takes less than five minutes.  Your calls make a huge difference because so few constituents ever call state legislators.  Here are your talking points:

Apodaca

1.  At a time when we need all the broadband improvements this state can muster, S.87 destroys those efforts for the benefit of a handful of out of state phone and cable companies. It’s classic protectionism — the same companies that helped write this bill are fully exempted from its onerous requirements.  The practical reality for rural North Carolina is either waiting for existing companies to deliver service they were always free to provide (and won’t), or allowing communities to do it themselves where appropriate.  Why should rural North Carolina have to depend on out of state corporations for basic broadband service many still don’t have?

2.  Not a single company has been harmed by community broadband projects in North Carolina.  In fact, it has created incentive to improve products and services while keeping prices stable, a welcome relief for consumers enduring annual rate increases far outpacing inflation.  Why is the state Senate trying to pass legislation that will guarantee higher bills and worse service?

3.  North Carolina’s fiber networks are not economic failures risking taxpayer dollars.  In fact, protections for taxpayers are already a part of the state code.  The General Assembly has already established: (1) rules governing Public Enterprises (NCGS Chapter 160A, Article 16); (2) strict rules in the Budget and Fiscal Control Act governing all municipal budgets and expenditures, including hearing and disclosure requirements (NCGS Chapter 159, Article 3); and (3) strict oversight of municipal borrowing by the Local Government Commission (NCGS Chapter 159).  S.87 attempts to micromanage public projects to the point where they simply cannot function and pay off bondholders and will, for future projects, ensure they never get off the ground.

4.  Now that the FCC ranks North Carolina dead last in broadband, isn’t it be time to allow new entrants to shake up the market and deliver some competition? Since when is legislating for less broadband better for this state?  The communities of Wilson and Salisbury now have the tools to compete with any wired city in America to attract new digital economy business and jobs.  S.87 sends exactly the wrong message — telling business the state wants to wait for the cable or phone company to eventually (if ever), deliver service other states now take for granted.  Businesses cannot wait.  We cannot wait.

5.  Provisions of this bill are unconstitutional.  By placing illegal regulatory burdens on only public providers of communications services (defined broadly) H.129/S.87 will harm municipal convention centers, public safety networks, smart grid systems, tower leasing contracts, and even make seemingly free public Wi-Fi networks vulnerable to lawsuits if the large incumbents want in on those services.

6.  The only real level playing field in broadband is the one that already exists without S.87.  Tell your senator you are tired of seeing these cable company-written bills come up in the Legislature year after year when the state has more important matters to worry about.  Time Warner Cable will do just fine without S.87, just as they do well in every other state where these kinds of bills would never get passed into law (or even proposed).

Senate Representation By County

2011-2012 Session

(click on your member’s name for contact information)

J.P. Morgan Chase’s enthusiasm to participate in AT&T’s acquisition deal with T-Mobile, as the sole lender of $20 billion in financing, could prove a risky strategy not only for AT&T and Chase, but for other segments of the credit industry, according to Bloomberg News.

AT&T needs the $20 billion bridge loan to help finance the takeover of T-Mobile, and J.P. Morgan will earn a cool $20 million minimum from brokering the 12 month deal.  By the end of the first year, Chase hopes to “syndicate” the loan, which is to say repackage and resell pieces of it to other banks interested in carrying part of the balance. When it comes to moorcroft group in terms of repaying your loan, contact experts to get advice or let companies like iva check on your situation and help you write off your debts.

Moody’s Investor Service was alarmed by the prospect of Chase handing over 17 percent of the New York-based bank’s equity for a single loan, and warned it was risky for all concerned.  In fact, the willingness of Chase to take on riskier loans has been deemed “credit negative” by Moody’s because it makes the bank’s loan portfolio look more exposed to a potential credit nightmare should AT&T renege.

For AT&T, regulator conditions could reduce the value of the acquisition or disallow it altogether.  AT&T could also lose standing if customers switch to other providers for telecommunications services.  Chase may not be too concerned because it will earn even more in fees if AT&T’s credit rating gets downgraded.  The biggest risk for Chase is it gets stuck holding the loan because other bankers refuse to purchase pieces of it.  That could result in Chase having to make up any losses among its other divisions, which include small business/consumer loans and credit cards.

And just when you thought the credit crisis was starting to ease.

But some on Wall Street believe Chase’s willingness to extend such a large amount of credit to a single company opens the door to other similar deals among large corporate clients — deals rejected as “too risky” over the past 24 months.

AT&T’s proposed takeover of T-Mobile is the world’s largest, rivaled only by a failed bid by an Australian conglomerate to takeover Potash Corp. of Saskatchewan last August for $40 billion.  The world’s largest mining company could not withstand scrutiny by Canadian regulators who rejected the deal as not in the best interests of anyone, except executives and shareholders of the two companies involved.