More drive-by reporting on Comcast’s usage caps.

When the media covers Internet Overcharging schemes like usage caps and consumption billing, it is often much easier to take the provider’s word for it instead of actually investigating whether subscribers actually need their Internet usage limited.

Comcast’s planned reintroduction of its usage caps on South Carolina customers begins Friday. Instead of the now-retired 250GB limit, Comcast is graciously throwing another 50GB of usage allowance to customers, five years after defining 250GB as more than generous.

The Post & Courier never bothered to investigate if Comcast’s new 300GB usage cap was warranted or if Charleston-area customers wanted it. It was so much easier to just print Comcast’s point of view and throw in a quote or two from an industry analyst.

In fact, the reporter even tried to suggest the Internet Overcharging scheme was an improvement for customers.

The newspaper reported Comcast was the first large Internet provider in the region to allow customers to pay even more for broadband service by extending their allowance in 50GB increments at $10 a pop. (Actually, AT&T beat Comcast to the bank on that idea, but has avoided dropping that hammer on customers who already have to be persuaded to switch to AT&T U-verse broadband that tops out at around 24Mbps for most customers.)

Since 2008, the company’s monthly limit has been capped at 250 GB per household. When customers exceeded that threshold, Comcast didn’t have a firm mechanism for bringing them back in line, other than to issue warnings or threaten to cut off service.

“People didn’t like that static cap. They felt that if they wanted to extend their usage, then they should be allowed to do that,” said Charlie Douglas, a senior director with Comcast.

Charleston is the latest in a series of trial markets the cable giant has used to test the new Internet usage policy in the past year. As with any test period, the company can modify or discontinue the plan at any time.

During the trial period in Charleston, customers will get an extra 50 GB of monthly data than they’re used to having. If they exceed 300 GB, they can pay for more.

“300 GB is well beyond what any typical household is ever going to consume in a month,” Douglas said. “In all of the other trial markets with this (limit), it really doesn’t impact the overwhelming super-majority of customers.”

The average Internet user with Comcast service uses about 16 to 18 GB of data per month, Douglas said.

Customers who use less than five GB per month will start seeing a $5 discount on their bills.

“We think this approach is fair because we’re giving consumers who want to use more data a way to do so, and for consumers who use less, they can pay less,” Douglas said.

Data caps are designed to stop content piracy?

The Charleston reporter asserts, without any evidence, “data-capping is a trend many Internet service providers are expected to follow in the next few years as the industry aims to reduce network congestion and to find safeguards against online piracy.”

Suggesting data caps are about piracy immediately rings alarm bells. Comcast and other Internet Service Providers fought long and hard against being held accountable for their customers’ actions. The industry wants nothing to do with monitoring online activities lest the government hold them accountable for not actively stopping criminal activity.

“It’s not about piracy, per se,” said Douglas. “We don’t look at what people are doing. The purpose is really a matter of fairness. If people are using a disproportionate amount of data, then they should pay more.”

Comcast’s concern for fairness and disproportionate behavior does not extend to the rapacious pricing and enormous profit it earns selling broadband, flat rate or not.

MIT Technology Review’s David Talbot found “Time Warner Cable and Comcast are already making a 97 percent margin on their ‘almost comically profitable’ Internet services.” That figure was repeated by Craig Moffett, one of the most enthusiastic, well-respected cable industry analysts. That percentage refers to “gross margin,” which is effectively gravy on largely paid off cable plant/infrastructure that last saw a major wholesale upgrade in the 1990s to accommodate the advent of digital cable television and the 500-channel universe. Broadband was introduced in the late 1990s as a cheap-to-deploy but highly profitable, unregulated ancillary service.

How things have changed.

Just follow the money….

Customers used to being gouged for cable television are now willing to say goodbye to Comcast’s television package in growing numbers. Today’s must-have service is broadband and Comcast has a high-priced plan for you! But earning up to 97 percent profit from $50+ broadband isn’t enough.

A 300GB limit isn’t designed to control congestion either. In fact, had she investigated that claim, she would have discovered the cable industry itself disavowed that notion earlier this year.

In fact, it’s all about the money.

Michael Powell, the head of the cable industry’s top lobbying group admitted the theory that data caps are designed to control network congestion was wrong.

“Our principal purpose is how to fairly monetize a high fixed cost,” said Powell.

Powell mentioned costs like digging up streets, laying cable and operational expenses. Except the cable industry long ago stopped aggressive buildouts and now maintains a tight Return On Investment formula that keeps cable broadband out of rural areas indefinitely. Operational expenses for broadband have also declined, despite increases in traffic and the number of customers subscribing.

[flv]http://www.phillipdampier.com/video/CNBC Internet v. Cable 8-20-10.flv[/flv]

Don’t take our word for it. Consider the views of Suddenlink Cable CEO Jerry Kent, interviewed in 2010 on CNBC. (8 minutes)

“I think one of the things people don’t realize [relates to] the question of capital intensity and having to keep spending to keep up with capacity,” said Suddenlink CEO Jerry Kent. “Those days are basically over, and you are seeing significant free cash flow generated from the cable operators as our capital expenditures continue to come down.”

Unfortunately, Charleston residents don’t have the benefit of reporting that takes a skeptical view of a company press release and the spokesperson readily willing to underline it.

If Comcast seeks to be the arbiter of ‘fairness,’ then one must ask what concept of fairness allows for a usage cap almost no customers want for a service already grossly overpriced.

AT&T and Verizon are among the biggest tech company spenders in Washington, paying millions every quarter to lobby federal and state lawmakers on how they can make life easier for the telecom giants.

AT&T increased their lobbying budget by a whopping 23 percent in the third quarter, easily beating year over year spending of $3.5 million in the third quarter of 2012. In just three months this year, AT&T spent $4.3 million lobbying lawmakers on regulatory relief, retiring the rural landline network, reform of cell tower placement policies, and trying to keep the FCC from gaining new oversight powers.

Verizon Communications had lobbying costs of $3.09 million last year at this time. This year, it reduced that amount by two percent, spending $3.04 million. But Verizon Wireless upped its political spending by 19 percent, from $1.1 to $1.2 million. Taken together, Verizon spent a collective $4.24 million on lobbying in the last three months. Verizon lobbied on some of the same issues AT&T did.

In contrast Google spent $3.4 million, Facebook spent $1.4 million, and Microsoft spent $2.2 million.

“Once again the lobbying disclosures demonstrate the sad truth about the state of our democracy,” said John M. Simpson, Consumer Watchdog’s Privacy Project director. “When the government is open for business, policymaking is all about who has the cash and is willing throw it around.”

USA Today reported Verizon has also once again achieved a 0% effective tax rate during the past 12 months, which means any owed taxes will be offset by a variety of accounting tricks:

A big reason that Verizon’s effective tax rate is so low, coming in at a negative 4.8%, is largely due to accounting. The company’s sped-up depreciation, severance and pension costs are large credits that contribute to pushing the company’s taxes down, says Jonathan Schildkraut of Evercore. But there’s also a distortion caused by the company’s 55% interest in Verizon Wireless. Vodafone, which owns 45% of Verizon Wireless, pays taxes on its share, but the entire profit is reported on income. Adjusting for this, Verizon’s effective tax rate is closer to 30%, the company says. Verizon is buying Vodafone’s stake, which will eliminate the issue in the future. Similarly, real estate investment trusts have low effective tax rates because they pass profit to shareholders, who then pay the taxes.

The question for investors is whether or not companies paying low effective tax rates might, eventually, attract the attention to regulators. “They are slow at getting at these issues,” Yee says.

Time Warner Cable, the nation’s second largest cable operator, has agreed to carry Al Jazeera America on its cable lineup nationwide, giving the network 10 million more potential viewers.

The contract, to be announced later today, will bring the English language U.S.-focused news channel to major cities, including Los Angeles and New York within weeks. Time Warner Cable customers in other cities will see the channel added by next March.

Al Jazeera America launched two months ago and has not been an initial ratings success. Despite being available in 44 million homes, fewer than 25,000 people watch the news channel at any given time. The ratings are comparable to Fox Business Channel after it launched.

“We said in January that we would consider Al Jazeera America,” Melinda Witmer, the chief video and content officer for Time Warner Cable. “Now that the channel is live, we think that it would be of value to our customers and are pleased to make it available.”

Time Warner Cable threw Al Jazeera’s predecessor, Current TV, off lineups the instant the network was sold to the Qatar-based news channel. AT&T U-verse also dropped Al Jazeera English just as it premiered, sparking a lawsuit.

The news network is touting the carriage agreement with Time Warner Cable as evidence the network is being taken seriously by cable industry executives. An Al Jazeera spokesman told the New York Times the company was in active negotiations with other cable and satellite providers to pick up the channel.

To win the agreement, Al Jazeera may have temporarily agreed to pay Time Warner Cable a launch fee described as compensation for marketing and ad support. Typically, cable networks receive payment for carriage, not the other way around.

Unlike Al Jazeera English, a global English language news channel intended for an international audience, Al Jazeera America is an American cable news channel, featuring recognizable news personalities including Soledad O’Brien and Ali Velshi, both formerly with CNN.

AT&T has expanded its TV Everywhere service to cover more devices and networks, adding more than 20 channels available for streaming outside of the home.

AT&T U-verse live TV streaming is available to customers subscribing to a U-family or higher U-verse TV package, and can be viewed on a growing number of devices including iPad/iPhone (iOS) and more than 25 current generation Android smartphone models.

Many, but not all popular cable networks are available for streaming, as are most premium movie channels.

But the biggest change subscribers are looking for is streaming those cable channels outside of the home on the go. Most cable carriage agreements still restrict out-of-home streaming, but providers are negotiating to drop that restriction.

“By making live TV content available across devices we’re enabling our customers to watch TV on their terms when and where they want it,” said Mel Coker, chief marketing officer, AT&T Home Solutions, in a statement. “U-verse has always been about delivering a TV experience built around our customers, and this enhancement gives them even more flexibility and control.”

The networks now available for out-of-the home viewing:

AXS TV, Big Ten Network, CNN, Disney Channel, Disney Jr., Disney XD, Encore, Encore-West, Encore Action, ESPN 1/2/3, ESPN U, Fox News Channel, Fox Business Channel, HDNet Movies, HLN, NFL Network, NFL RedZone, Showtime (All variants), Starz (All variants), The Movie Channel, The Movie Channel West, TMC Xtra, and TMC Xtra-West.

All online viewing from a U-verse broadband connection counts against AT&T’s U-verse monthly usage cap of 250GB, presently unenforced in most areas.

An enterprising reader of the Broadband Reports‘ AT&T Forum stumbled on proposed pricing for AT&T’s faster speed services for U-verse and, presumably, their planned fiber-to-the-home rollout in Austin, Tex.:

The prices are no bargain in comparison to the $70 a month Google charges Kansas City residents for 1,000/1,000Mbps service, but on the lower end, AT&T’s 45Mbps U-verse option is comparable to Time Warner Cable’s 50/5Mbps tier, which now sells for $65-75 a month on a one-year promotion:

Time Warner Cable’s latest broadband offers