CBC Radio One: The Current explores Internet Overcharging in Canada:

It’s hard to believe that just eighteen years ago — back in 1993 — we were only beginning to grasp what the Internet could do for us. Today, the Internet is an integral part of the global economy, a powerful political tool, and something many couldn’t imagine living without. That’s partly why the cost of Internet access has been at the centre of a national debate for the past week.

The debate was sparked by the CRTC’s decision to approve what’s known as “usage-based billing.” Then Federal Industry Minister Tony Clement tweeted that Ottawa wouldn’t accept the ruling. And the CRTC is now reviewing its decision and has put out a call to Canadians asking them to weigh in with their opinions.

Today we look at the implications of the different ways of charging for Internet access and we also ask if the Internet should be treated more like a utility or even a human right.

CBC Radio One’s program, The Current explores Canada’s attitude towards usage-based billing and what implications it hold for an increasingly digital society. Steve Anderson from Openmedia.ca joins the program to debate the notion usage-based billing “saves” light users’ money.  (28 minutes)
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A Montreal blogger experienced the wrath of some Videotron employees when he casually snapped a photo of their recently-remodeled store in the Carrefour Agrignon.

Elias Makos shares the crazy story of his experience last November:

Walking to the Best Buy, I noticed the Videotron store, which has recently been remodeled as the company focuses more and more on its new cell phone services. Not only was the store remodeled, but there was a ratio of about 6 employees per customer in the store.  This was hilarious to me, and even more so when I think about how Videotron’s parent company, Quebecor, has locked out 253 Journal de Montreal employees for almost two years now. Apparently the company can’t pay for journalism but can afford an army of numbskulls selling cell phone contracts.

So I took out my phone and snapped one picture of the store from about 20 feet away. Put my phone back in my pocket and walked to Best Buy. About a minute later, I feel a hand on my back.

The photo worth a thousand punches to the face. (Courtesy: Elias Makos)

“Why did you take a picture of me?”

I was floored. “What?” I said, realizing that it was a Videotron employee from the store. He asked the same question again. I looked at him, flabbergasted that he even cared. He looked very nervous, like he knew he and his store was incompetent. He told me not to take pictures of his store, or else. I stared at him, realized I didn’t have to tell him a thing, and walked away, although not before I must have gave him the most confused look in my life.

I get to Best Buy, walk to the games section (major cutie working there today!) and found several new copies of both games. I was happy. I picked both games up. Then, out of nowhere, this guy approaches me.

“If you take another photo of my store, I’m going to punch you.”

Minutes later, the mall’s security guards approached Makos demanding he delete the photos, claiming taking photographs inside the mall violates mall policies.

Makos’ story turned into a bigger story on CBC Radio, with company officials trading accusations with Makos over whether the public has a right to snap pictures of its stores.

Foolishly, Videotron didn’t learn the cardinal rules of good public relations — strong-arming a member of the public and reflexively taking the side of the goon-employees who subsequently stalked Makos inside the mall will never turn out well no matter how you defend it.

CBC Radio Montreal talks with area blogger Elias Makos, who related his ridiculous encounter with some bored (and boorish) Videotron employees at the local mall who were more than a little camera shy. (12 minutes)
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Does today's decision assure the birth of Comzilla, ready to destroy anything or anyone in its path, or is it the next colossal big media deal flop worthy of AOL-Time Warner?

The wedding of Comcast and NBC-Universal was given the blessings of two federal agencies today that all but seals the multi-billion dollar deal.

In a 4-1 decision, the Federal Communications Commission approved the merger.  It’s chairman, Julius Genachowski, claimed it would ultimately be good for consumers as the company promised to add at least 1,000 hours of news and information programming and a new ultra-budget “lifeline” broadband tier priced at $9.95 per month for low-income families.

The lone dissenter, Democratic commissioner Michael Copps, rejected notions that a combined company the size of Comcast, which controls more than a quarter of all cable subscribers, and NBC-Universal, a major media company, would deliver anything to consumers.

“It’s too big. It’s too powerful. It’s too lacking in benefits for American consumers,” Copps said after the FCC vote to approve the merger. “And it continues us down a road of consolidation we’ve been on for a couple of decades now.  And the most threatening part about it is that this is not just traditional media, but it’s new media, too. It touches just about every aspect of our media environment.”

National Public Radio’s ‘All Things Considered’ gave measured coverage to today’s Comcast-NBC merger developments, and how it will impact consumers. (3 minutes)
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Indeed the combined Comcast-NBC will own or control one of every seven television channels and networks seen by Americans.  Copps worries that kind of media concentration is sure to reduce diversity in programming and on-air voices.

Even worse, some analysts predict the merger could trigger a new wave of media consolidation as other players try to maintain their positions in the media marketplace.  Second-place Time Warner Cable could begin looking for merger opportunities with smaller cable companies, such as Cox, for example.

Just about an hour after the FCC gave approval, the Justice Department and five states’ Attorney General announced a tentative settlement that could resolve concerns that the transaction was anti-competitive.

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WNYW-TV in New York reported on today’s merger decision and explained how Comcast customers, and online video fans, could be impacted.  (3 minutes)

The Terms & Conditions

Two different federal agencies insisted on Comcast’s agreement to several terms and conditions before agreeing to the deal.  Many of them presented no problem for Comcast, who had voluntarily agreed to several of them early on in negotiations.  But the Justice Department delivered one of the strongest conditions, and a first for online video protection — it insisted the new combined entity of Comcast-NBC bow out of its voting rights in Hulu, the online video service.

√ No Playing Favorites: Comcast has to agree that if it carries its own news and business channels, it has to include competitors on the same tier.

Since Comcast-NBC has ownership interests in so many news, sports, and weather channels, making space for the competition was considered crucial by federal regulators.  The cable company can’t bury its competitors in Channel Siberia, or stick them on “digital tiers” that are priced higher than standard cable service.  Who wins?  Bloomberg News, rarely found even by cable viewers who go looking, and the very low-rated Fox Business Channel, which can’t attract 30,000 viewers on a good day.  Both will find prominent positions on Comcast Cable going forward, even if nobody watches.

√ Cheap Internet Access for Qualified Families: Comcast has agreed to provide a “lifeline” broadband service, but only for families pre-qualified by federal eligibility for free school lunches.

No word on what speeds these customers will receive, and Comcast estimates the program will barely make a dent in its bottom line.  It is expected to reach only around 400,000 homes nationwide, and only as long as those subscribers remain eligible under federal guidelines.  No free lunch for broadband.

√ Standalone Internet Service Must Be Provided: Comcast must sell at least a 6Mbps broadband plan without cable or telephone service for $49.99 a month for three years.

Since Comcast already routinely sells standalone broadband service to customers at around this price, this was hardly a concession.  Comcast can still pile on extra fees, such as their overpriced cable modem rental, and any other charges that could be mandated by federal, state, or local government in the future.  They can also keep their usage caps.

√ Comcast must agree to the FCC’s Homeopathic Net Neutrality Rules:  Comcast has to agree to the FCC’s heavily-watered down definition of Net Neutrality… the ones Comcast itself suggested.

Since the FCC largely caved-in to Big Telecom’s lobbying against Net Neutrality, Comcast’s agreement to adhere to what the FCC calls Net Neutrality won’t present any problems, because those terms were similar to what Comcast had asked for all along.  Their “digital phone” service is exempted, which means Comcast can “manage” competing Voice Over IP services at its pleasure.

√ Evidence That PBS Has A Lobbyist, Too — Special Favors for Public Broadcasting: Public television stations win carriage protection from Comcast “for several years.”

In an effort to free spectrum, PBS stations could be pressured to give back some channels or reduce their transmitter power to free up UHF frequencies for more wireless broadband.  Should this happen, Comcast has agreed to keep those stations on their cable systems as if nothing changed at all.  It assures stations that even if their broadcast coverage areas are reduced, their cable carriage will stay the same.

√ Binding Arbitration Comes to Buyers of Comcast-owned Networks:  If a cable system or other provider runs into trouble getting an agreement with Comcast, the FCC offers help.

To protect other cable systems, telco-TV, and satellite companies from uncompetitive pricing or access blockades to Comcast-controlled networks, the cable company agrees to come to the table and submit to binding arbitration over carriage disputes.  Unfortunately for Comcast subscribers, the cable giant can’t force broadcasters or other cable networks to the same table to settle their own carriage wars.

√ Online Access to Programming Comes to Existing Players, Unless Something Big Changes: Everyone loves the status-quo, and this agreement assures it.

The Department of Justice provisions protecting access to online video programming were carefully crafted by lawyers with one eye on Washington and the other on Wall Street.  It effectively provides “stability” in the marketplace and avoids the kinds of competitive surprises Wall Street hates.  Effectively, the agreement grants access to Comcast-owned programming to ventures that existed prior to the agreement reached today.  Existing players have the government’s assurance carriage contracts are secure.  Those with a pre-existing relationship to Comcast can also purchase the entire bouquet of Comcast-controlled programming (no a-la-carte) at prices similar to those charged to other cable and satellite customers.

But brand new players that threaten to turn existing business models on their heads?  Forget it.  The agreement says nothing that would require access to Comcast programming for upstart services like ivi, or even Google TV for that matter.  The only potential, real-world competitive scenario comes if an existing player (say Time Warner Cable, Verizon FiOS, or AT&T U-verse) decided to start a national virtual online cable company open to any American, anywhere.  What are the chances of that happening?  How many of you can choose Time Warner -or- Comcast? Verizon FiOS -or- AT&T U-verse?  Would AT&T risk its U-verse revenue selling Time Warner Cable customers the same channel lineup, knowing it can’t also easily bundle broadband and phone packages with it?

√ No Voting Rights for Hulu: Comcast agrees to limit its role in one of the biggest potential reasons some consumers are prepared to cut cable’s cord.

The Justice Department’s requirement that Comcast effectively butt-out of the day to day decisions affecting Hulu may protect consumers, but Hulu’s partners don’t want to devalue their programming by giving it away for free forever, either.  Nothing prohibits the birds-of-a-feather-partners in Hulu to put the service under a full ad load or behind a pay wall, reducing its value and interest to consumers.  Or, the whole project could be terminated at the behest of News Corp. and Disney.

Phillip Dampier: The real answer to this question is "both."

Whatever consumer protections the FCC and Justice have included, they won’t last forever.  Virtually all expire within three to seven years, at which point Comcast might be humbled by the culmination of a bad business decision the likes of AOL-Time Warner, or become Comzilla, ready to trample its competition (and consumers) into the dirt.

Was This a Commission Cave-In or a Foregone Conclusion?

Although Commissioner Copps calls today’s decision a “dangerous” deal, some ex-regulators suggest the package presented to federal regulators was effectively a foregone conclusion.

Bruce Gottlieb was formerly Chief Counsel of the Federal Communications Commission, and offered his take on today’s developments for The Atlantic:

How mergers at the FCC will play out is notoriously hard to predict, but the ultimate result is not. The historical truth is that, in virtually every instance, the commission will approve any major proposed transaction. The only time in recent memory that the commission declined to do so was the proposed merger of the two leading satellite-TV providers (Echostar and DirecTV) — and that marriage was running into problems with other agencies long before the FCC put the final nail in the coffin.

(Yes, then-Chairman Reed Hundt also famously ended rumors of an AT&T and Southwestern Bell merger in 1997 by preemptively declaring it “unthinkable.” But those companies simply had to wait until 2005, when a different FCC chairman let it go through.)

The real action at the FCC involves what “conditions” the agency will put on a merger. These are supposed to be narrowly tailored to address specific harms raised by the merger at issue. But, regardless of who is in charge at the agency, it’s all relative.

Often, the conditions applied to a particular merger have more to do with what the chairman and commissioners at the time want to achieve on an industrywide basis. It’s just easier to get these things done when you have the extraordinary leverage of controlling the timing of a multibillion-dollar transaction that the parties are desperate to consummate.

[…]  The FCC’s rules, as described in the press release announcing the merger, appear to be aimed at ensuring that “over the top” providers have fair access to programming (which the NBCU part of Comcast-NBCU will provide), as well as to consumers (which the Comcast part of Comcast-NBCU will provide).

This is, by far, the strongest statement yet from the commission about the importance of over the top video competition. But the business and regulatory stakes in this fight are only going to increase over time. Indeed, the two Republican commissioners (Robert McDowell and Meredith Attwell Baker) issued separate statements saying they have concerns over whether the FCC should be writing rules to encourage over the top video. So this is likely to be the first skirmish in what will surely be a long and bloody war.

In the weeks ahead, the lawyers will be able to parse the specific provisions to see where the loopholes are and how it will all play out in practice. The details surely matter. But years from now, the specifics of what was decided in this merger may mean a lot less than the fact that the FCC is now deeply involved in the multifront war to decide who will win online video.

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More than a year ago, PBS’ ‘The Newshour’ explored the reasons why Comcast and NBC-Universal would want to join forces.  Now, after millions of dollars of Comcast subscribers’ money has been spent lobbying for approval, will consumers ultimately pay an even higher price later on?  (12/3/2009 — 11 minutes)

What would you do if your broadband bill was the same as your monthly rent?

That’s a question 21-year-old Notre Dame de Grace resident Amber Hunter has been dealing with since the neighbors began hacking their way into her wireless router, gaining access to her cable modem service from Videotron, Ltd., and running her bill into the next province.

It’s the predictable outcome of what happens when Internet Overcharging schemes gain traction, leaving ordinary consumers literally holding the bill.

Videotron sells usage limited broadband service across Quebec, but heavy users who routinely exceed their arbitrary usage caps knew there was a limit on the overlimit fees Videotron charged.

Not anymore.

Videotron left the usage caps on, but removed the limit on how much they can charge customers who exceed their monthly usage allowance.

Videotron sets prices like the OPEC of the Internet -- the sky is the limit

“The sky is the limit, or at least your bank account,” writes our Montreal reader Hei.  “The only thing unlimited with Videotron are the overlimit fees.”

Hunter had no idea she was being hacked.

“I had no idea what a gigabyte was, so when I started getting higher bills, I just assumed it was from watching TV shows online,” Hunter says.

Her boyfriend told her otherwise, making it clear it was impossible for her to be running up 350GB a month in usage just from watching a few movies and TV shows.

Since August, Hunter has accumulated more than $1,800 in broadband bills stemming from parties unknown who hacked their way into her wireless router and “borrowed” her Internet account.  Videotron itself is directly responsible for part of this debacle, encouraging Hunter to upgrade to a higher tier of service that upgraded her from a 30GB usage allowance to a 100GB usage allowance, with a major catch.

Hunter had become accustomed to paying her usual broadband bill plus the $50 maximum penalty charged for her “overuse.”  So a Videotron representative suggested a higher usage allowance plan might lower her bill.  But somehow, the Videotron customer service agent forgot to mention that the new plan no longer included a limit on overlimit charges.

When Amber switched plans, her broadband bill exploded.  Now the waitress hands over most of her weekly salary to Videotron.

“I’m a student, and I work at a bar, and now most of the money I have goes to pay my Internet bill,” Hunter told the Montreal Gazette. “It’s more than I pay for school and books, and I don’t have a lot of money left for food.”

She still owes the cable company $506 and they aren’t interested in providing her any service credits beyond the $313 they gave her a few months ago.

It took a Videotron help desk employee to finally unravel the mystery of the Internet Overcharges — someone was hacking into her wireless network.  Exactly who has been living their online life usage-limit free at Amber’s expense may never be known. Those living in apartment complexes and other multiple dwelling units can often find a dozen or more wireless connections, some password protected, others not.

Hunter’s wireless network was secured with a difficult to guess password using a four year old Linksys router.  Unfortunately, older routers often lack robust security and are easily hacked.

A handful of Canadian ISPs still offer unlimited broadband accounts.

As far as Videotron is concerned, it’s all Hunter’s fault — she should have understood what a gigabyte was, how many she was supposed to be using, what the security capabilities of her router were, that they were properly enabled, that she checked her usage on a daily basis looking for anomalies — investing her time, effort, and energy to stop the cable company before it billed her an enormous amount… again.

Speaking for Videotron, Isabelle Dessureault said, “It’s a case where Videotron showed some understanding and listened to what happened. We’re well-renowned in the industry for our technical support team. We credited her account for $313, but at a certain point, we need to share the responsibility. We don’t like these kind of situations.”

Videotron’s responsibility to their customers stopped where their profit margin began.  The company could have sent Amber a bill for the wholesale cost of her Internet usage, which she could have paid with a few of her bar tips.

Because Hunter’s broadband bills were now rivaling her monthly rent she decided to invest in her financial future, buying a new router and making sure the wireless was turned off.  Today she runs dozens of meters of Ethernet cable between all of her computers, just to keep the neighbors off her connection.

Although Videotron has become intractable, demanding Amber pay up, one of their competitors used the opportunity to score public relations points that Videotron sacrificed.

Jarred Miller, the president of the Internet Service Provider YOUMANO offered to cover all of Hunter’s overage fees amassed over the past year that also includes a free year of Internet service with his company, a generous offer Hunter will take.

YOUMANO is one of a handful of Canadian ISPs still offering unlimited Internet access, and do not think of themselves as the OPEC of the Internet.

The entire affair is a warning to Americans.  If you think Videotron is an Internet evildoer, imagine what Verizon, AT&T and Comcast could do to your bank account.  If they have their way, you’ll need to become intimately familiar with your router, the concept of a gigabyte, and take a class in “negotiating to win” when fighting over your future enormous broadband bills.

Listen to an interview with Amber Hunter. She appeared on this morning’s Daybreak on CBC Radio Montreal to discuss her experience with Videotron Internet Overcharging. (8 minutes)
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While Time Warner Cable and Sinclair Broadcasting duel to the Dec. 31 deadline, some Time Warner Cable customers are using the dispute to their advantage — demanding, and winning price concessions on their cable service.

Time Warner Cable has fielded so many calls about the dispute, it has added a message to its customer call-in lines to share its side of the dispute.

Listen to the announcements Time Warner Cable is using around the country on its customer service lines to address the Sinclair-Time Warner dispute. (7 minutes)
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Some customers tired of being put in the middle have decided to take their business elsewhere.  Others are just threatening, which brings forth customer retention deals to keep customers from cutting Time Warner’s cord.

“I scored a one year extension of my new customer deal — $99 a month for every kind of service the cable company offers,” writes Scott from Syracuse, N.Y.  Time Warner Cable is expected to drop WSYT (Fox) and WNYS (MyNetwork TV) late Friday night.  “I told them their rate hike notice was bad enough, but dropping two stations from my lineup without offering me a refund was too much.”

Scott was prepared to switch to Verizon FiOS, but Time Warner offered a price he’ll take for some inconvenience.

“I threw my Time Warner rate hike notice in the trash — it doesn’t apply to me for a year,” Scott says.  “It took ten minutes on the phone with the cable company and now I’ll save hundreds a year.”

In Texas, Time Warner Cable customers trying to exit the cable company for a competitor found the cable company’s term contract harder to walk away from.

“They are playing hardball with me, telling me I’ll have to pay an early termination fee if I switch,” says Stop the Cap! reader Rod who lives in San Antonio.  He’s preparing to say goodbye to KABB (Fox) and KMYS (MyNetwork TV).”

“I told them with their attitude, it would be worth paying the fee to see the back of them,” Rod says.  “Besides, when you tell some of their competitors about the cable company’s exit fees, they sweeten the deal as a sign of goodwill, something I am not getting from the cable company.”

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Sinclair stations across the country are airing various news reports about the upcoming signal blackout on both Time Warner Cable and Bright House Networks, which uses Time Warner to negotiate programming contracts.  Virtually all are biased towards Sinclair’s position, and ignore the fact Time Warner plans to import Fox network programming regardless of what happens.  (25 minutes)

In Rochester and Buffalo, the cable company is willing to extend their $99 triple play promotion to customers threatening to drop service over the Sinclair dispute, especially when customers also mention the company’s recently announced rate hike.

“If the first person you speak with doesn’t offer you a better deal, hang up and call back,” advises Susan, our reader in Amherst, N.Y.  Both she and her mother in Cheektowaga are saving $35 a month for the next year all thanks to Sinclair and Time Warner’s money fight.

One of the stations impacted in the dispute

“We would have never thought about doing this before we started reading Stop the Cap!,” she says. “We had no idea we could get these kind of deals.”

“We’d lose WUTV (Fox) and WNYO (MyNetwork TV), but Time Warner promises all of the Fox network shows will still be aired and losing MyNetwork TV is hardly a loss at all,” Susan shares.  “Just call them and use the word ‘cancel’ and see what they offer.”

Sinclair stations are notorious for running local news operations on the cheap, when they bother to run local news at all.  So many viewers remain blissfully unaware of the dispute because many of the affected Sinclair stations are low-rated afterthoughts.  Of the 35+ impacted stations, fewer than six have serious local news operations, and many of those are in last place in the local ratings.  That’s a point Time Warner Cable had reportedly raised in their negotiations, noting the stations are not worth Sinclair’s asking price.

But the cable operator is also not saying a whole lot about the dispute on their various local news channels.  The company has instead taken out full page advertisements in newspapers alerting viewers to the upcoming signal disruptions and pushing customers to visit the cable operator’s national carriage dispute website: RollOverOrGetTough.com.

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Time Warner Cable briefly mentioned the dispute between the cable company and Sinclair Broadcasting on a few of their local news channels.  (2 minutes)

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WHAM-TV in Rochester took a third party look at the dispute and explained it to western New York viewers.  Special bonus: A brief interview with Scott Fybush, editor of Northeast Radio Watch who understands western New York media like few others.  (3 minutes)