Alito

Justice Samuel Alito was forced to recuse himself from nearly six dozen cases brought to the Supreme Court in the last 10 months because the Alito family owns stock in many of the corporations involved in litigation.

When Alito’s wife Martha Ann’s father died last year, the Alito family inherited a wealth of stock worth up to $1.25 million in some of America’s largest companies, including AT&T and Verizon Communications.

The Associated Press reports Alito’s tardy financial disclosure for 2012 revealed the justice’s reasons for recusal: his sudden ownership of shares in large telecom, pharmaceutical, oil and gas, and tobacco companies.

Federal law requires justices to step away from cases where there is a financial conflict of interest. Alito’s inherited stock represents just such a conflict.

In one case, however, Alito found himself holding Comcast Corp. stock after hearing arguments in a massive class action antitrust case representing two million customers the plaintiffs argued were being overcharged by an illegitimate cable monopoly.

Alito’s Comcast stock was purchased and sold last December. The Court’s 5-4 decision, written by Justice Antonin Scalia, was announced March 27. Alito’s deciding vote fundamentally raised the bar on future lawsuits, making it much more difficult for class action cases to be brought before the courts.

The Comcast suit, in the courts since 2003, argued that cable subscribers in Pennsylvania, New Jersey and Delaware were overcharged at least $875 million because of Comcast’s efforts to monopolize cable service in the Philadelphia area. Comcast amassed its dominant position by buying or swapping cable systems in the region to create a single large cable provider serving the majority of southern New Jersey, Delaware, and southeastern Pennsylvania. By 2002, the lawsuit claimed, Comcast had achieved a 77.8 percent market share.

Comcast argued the lawsuit was too complicated and its proposed method of calculating damages was faulty. The Court’s conservative justices agreed with Comcast, finding the lawsuit fell “far short of establishing that damages are capable of measurement.”

• Voting for Comcast’s position: Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito.
• Voting against Comcast: Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.

A study recently published in the Minnesota Law Review found the current Supreme Court is by far the most corporate-friendly of any court in at least 65 years, noting “the Roberts court is indeed highly pro-business — the conservatives extremely so and the liberals only moderately liberal.”

The top two most likely to vote in favor of big business among all justices seated since 1946 are Chief Justice Roberts and Justice Samuel A. Alito, Jr.

“There was a time when being ‘business-friendly’ meant giving corporations a leg-up and a level playing field because doing so creates jobs and bolsters the economy,” wrote Supreme Court reporter Jonathan Valania. “Today, ‘business-friendly’ means letting corporations socialize their costs while privatizing their profits. It means letting corporation literally write the laws that govern them. It means rolling back regulations and de-fanging oversight [….] What we are really talking about is corporatism.”

Roberts

Brian Roberts, the CEO of Comcast-NBC-Universal has two things to celebrate this week:

1. His exclusive invitation to golf with President Barack Obama at the Vineyard Golf Club on Martha’s Vineyard, joined by World Bank president Jim Kim and former U.S. Trade Representative Ron Kirk;
2. He is a billionaire again.

Thanks to a series of rate increases and improving broadband sales, Comcast’s chief executive has now amassed just over one billion dollars in assets, estimates Forbes magazine.

Much of his net worth rests in more than $800 million in Comcast stock controlled by Roberts. Comcast shares are up almost 30 percent in the last year and over 105 percent in the past 24 months. Comcast reported revenue of $16.27 billion in the second quarter alone.

Comcast’s earnings fueled the buyout of NBC-Universal.

Roberts had been a billionaire club member before, appearing on Forbes‘ 400 Richest Americans list in 1999 after inheriting the majority of his father’s stock, worth $750 million. By 2001, that stock increased in value to $1.2 billion. But by 2003, depressed Comcast share prices meant Roberts’ net value dropped to $625 million.

Executive compensation at most cable operators has increased right along with the prices customers pay for service.

Verizon Voice Link

The New York State Public Service Commission has announced it will hold public hearings in Ocean Beach in Suffolk County, N.Y. to hear from angry Fire Island residents and others about their evaluation of Verizon’s controversial wireless landline replacement Voice Link, which Verizon hopes to eventually install in rural areas across its operating territories.

“Verizon needs to stop lying,” said Fire Island resident Debi May who lost phone service last fall after Hurricane Sandy damaged the local network. “Don’t tell me you can’t fix my landline service. Tell me you won’t.”

She is one of hundreds of Fire Island residents spending the summer without landline service, relying on spotty cellular service, or using Verizon’s wireless landline alternative Voice Link, which many say simply does not work as advertised. In July, the CWA asserted Verizon is trying to introduce Voice Link in upstate New York, including in the Catskills and in and around Watertown and Buffalo.

“I’ve been on the phone with Verizon all day,” Jason Little, owner of the popular Fire Island haunt Bocce Beach tells The Village Voice. The restaurant’s phone line and DSL service is down again. Just like last week. And three weeks before that. Like always, Verizon’s customer service representatives engage in the futility of scheduling a service call that will never actually happen. Verizon doesn’t bother to show up in this section of Fire Island anymore, reports Little.

“They never come,” he says. So he sits and waits for the service to work its way back on its own — the result of damaged infrastructure Verizon refuses to repair any longer. Until it does, accepting credit cards is a big problem for Little.

It’s the same story down the street at the beachwear boutique A Summer Place. Instead of showing customers the latest summer fashions, owner Roberta Smith struggles her away around Verizon’s abandonment of landline service. She even purchased the recommended wireless credit card machine to process transactions, but that only works as well as Verizon Wireless’ service on the island, which can vary depending on location and traffic demands.

Smith tells the newspaper at least half the time, Verizon’s wireless network is so slow the machine stops working. If she can’t reach the credit card authorization center over a crackly, zero bar Verizon Wireless cell phone, the customer might walk, abandoning the sale.

National Public Radio reports Verizon’s efforts to abandon landline service on Fire Island and in certain New Jersey communities is just the first step towards retiring rural landline service in high cost areas. But does Verizon Voice Link actually work? Local residents say it doesn’t work well enough. NPR allows listeners to hear the sound quality of Voice Link for themselves. (5 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Verizon’s decision is making life hard for Fire Island’s small businesses.

The Village Voice notes Verizon CEO Lowell McAdam didn’t make the decision to scrap rural copper wire landline service to improve things for customers. He did it for the company.

“The decision wasn’t motivated by customer demand so much as McAdam’s interest in increasing Verizon’s profit margins,” the Voice writes.

Tom Maguire, Verizon’s point man for Voice Link, has not endeared himself with local residents by suggesting Fire Island shoppers should get around the credit card problem by bringing cash.

“Remember what happened to Marie Antoinette when she said ‘let them eat cake’,” suggested one.

For some customers who appreciate the phone company’s cost arguments, Verizon’s wireless alternative wouldn’t be so bad if it didn’t work so bad.

“It has all the problems of a cellphone system, but none of the advantages,” Pat Briody, a homeowner on Fire Island for 40 years told NPR News.

“I don’t think there’s anyone who will tell you Voice Link is better than the copper wire,” says Steve Kunreuther, treasurer of the Saltaire Yacht Club.

Jean Ufer says her husbands’ pacemaker depends on landline service to report in on his medical condition.

“Voice Link doesn’t work here,” reports resident Jean Ufer, whose husband depends on a pacemaker that must “check in” with medical staff over a landline the Ufer family no longer has. “It constantly breaks down. Everybody who has it hates it. You can’t do faxes. You can’t do the medical stuff you need. We need what we had back.”

Residents who depended on unlimited broadband access from Verizon’s DSL service are being bill-shocked by Verizon’s only broadband replacement option – expensive 4G wireless hotspot service from Verizon Wireless.

Small business owner Alessandro Anderes-Bologna used to have DSL service from Verizon until Hurricane Sandy obliterated Verizon’s infrastructure across parts of the western half of Fire Island. Today he relies on what he calls poor service from Verizon Wireless’ 4G LTE network, which he claims is hopelessly overloaded because of tourist traffic and insufficient capacity. But more impressive are Anderes-Bologna’s estimates of what Verizon Wireless wants to charge him for substandard wireless broadband.

“My bill with Verizon Wireless would probably be in the range of $700-800 a month,” Anderes-Bologna said. That is considerably higher than the $29.99 a month Verizon typically charges for its fastest unlimited DSL option on Fire Island.

Despite the enormous difference in price, Verizon’s Maguire has no problems with Verizon Wireless’ prices for its virtual broadband monopoly on the landline-less sections of the island.

“It’s a closed community,” he says. “It’s the quintessential marketplace where you get to charge what the market will bear, so all the shops get to charge whatever they want.” And that’s exactly what Verizon is doing.

WCBS Radio reports Verizon is introducing Voice Link in certain barrier island communities in New Jersey. But the service lacks important features landline users have been long accustomed to having. (1 minute)
You must remain on this page to hear the clip, or you can download the clip and listen later.

In nearby New Jersey, Verizon’s efforts to introduce Voice Link has met with resistance from consumer groups, the state’s utility regulator, and the Rate Counsel. Over 1,400 customers on barrier island communities like Bay Head, Brick, and Mantoloking cannot get Verizon DSL or landline service any longer because Verizon refuses to repair damaged landlines.

Tom Maguire

“The New Jersey coast has been battered enough,” said Douglas Johnston, AARP New Jersey’s manager of advocacy. “The last thing we need is second-class phone service at the Shore. We are concerned that approval of Verizon’s plans could further the gap between the telecommunications ‘haves’ and ‘have-nots’ and could create an incentive for Verizon to neglect the maintenance and repair of its landline phone network in New Jersey.”

In some cases, Verizon has told customers they can get landline phone service from Comcast, a competitor, instead.

State consumer advocates note that other utilities including cable operators have undertaken repair, replacement, and restoration of facilities in both New York and New Jersey without the challenges Verizon claims it has.

“Only Verizon, without evidentiary support, is seeking to jettison its obligations to provide safe, proper and adequate service to the public,” wrote the New Jersey Rate Counsel in a filing with the Federal Communications Commission.

New York Senator Phil Boyle, who represents Fire Island residents, is hosting a town hall meeting tonight to discuss the move by Verizon to replace copper-wire phone lines on Fire Island with Voice Link. The meeting will be held at the Ocean Beach Community House in Ocean Beach from 5-7pm.

The New York State Public Service Commission will be at the same location Saturday, Aug. 24 starting at noon for a public statement hearing to hear from customers about how Verizon Voice Link is working for them.

It is not necessary to make an appointment in advance or to present written material to speak at the public statement hearing. Anyone with a view about Voice Link, whether they live on the island or not are welcome to attend. Speakers will be called after completing a card requesting time to speak. Disabled persons requiring special accommodations may place a collect call to the Department of Public Service’s Human Resources Management Office at (518) 474-2520 as soon as possible. TDD users may request a sign language interpreter by placing a call through the New York Relay Service at 711 to reach the Department of Public Service’s Human Resource Office at the previously mentioned number.

Fire Island

Those who cannot attend in person at the Community House, 157-164 Bay Walk, Ocean Beach can send comments about Voice Link to the PSC online, by phone, or through the mail.

• E:Mail: [email protected]
• U.S. Mail: Secretary, Public Service Commission, Three Empire State Plaza, Albany, New York 12223-1350
• 24 Hour Toll-Free Opinion Line (N.Y. residents only): 1-800-335-2120

Your comments should refer to “Case 13-C-0197 – Voice Link on Fire Island.” All comments are requested by Sept. 13, 2013. Comments will become part of the record considered by the Commission and will be published online and accessible by clicking on the “Public Comments” tab.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Al Jazeera US islanders battle telecom giant 8-13-13.flv[/flv]

Al Jazeera reports Fire Island residents are fighting to keep their landlines, especially after having bad experiences with Verizon Voice Link. (3 minutes)

Comcast’s usage caps are back for customers in three states.

Comcast has decided usage caps are in the future for more of its broadband customers.

Effective Sept. 1 XFINITY Internet Service will be capped to 300GB of monthly usage in central Kentucky, Savannah, Ga., and Jackson, Miss. Comcast says the plan provides “additional choice and flexibility.”

We’re uncertain how it does that, exactly.

Comcast will have the additional choice of slapping a $10 overlimit fee for allowance offenders for every extra 50GB of data consumed.

But the company says it will be initially flexible in how it penalizes those heavy users.

“In order for our customers to get accustomed to the new data usage plan, we will be implementing a program that gives you three courtesy months for exceeding the 300GB in any 12-month period,” writes Comcast in a new FAQ. “That means you will only be subject to overage charges if you exceed the 300GB for a fourth time in a 12-month period. On the fourth (and any subsequent occurrence), you will be notified that you have exceeded your 300GB via an email and in-browser notification, that an additional 50GB has automatically been allocated to your account, and that applicable charges will be applied to your bill.”

Choice and flexibility for the customer or Comcast’s bottom line?

Customers with questions and concerns about Comcast’s expanding Internet Overcharging scheme can call Comcast Customer Security Assurance at 1-877-807-6581. Customers might want to assure Comcast if they are going back to usage caps, they will start shopping for a different provider. Stop the Cap! recommends customers in these areas protest the usage caps firmly and loudly.

“There are no legitimate engineering or economic justifications for these caps,” notes consumer group Free Press. “But Comcast’s new Internet Overcharging scheme and its discriminatory treatment of competitors’ video offerings do pose a grave threat to future video competition.”

And to your wallet.

Analysts have estimated that Comcast’s profit margins on broadband service are at least 80 percent or higher. In 2008, Sanford C. Bernstein & Co. analyst Craig Moffett estimated Comcast’s data margins at 80 percent, and Credit Suisse reported in fall 2010 that Comcast’s gross margins on high-speed data had grown to 93 percent.

Since withdrawing a nationwide cap of 250GB in 2012, Comcast had tested usage caps only in Nashville, Tenn., and Tucson, Ariz.

Stop the Cap! thanks reader “MrPaulAR” for the news tip.

Big, Bigger, Biggest… Bigger Still

Comcast has plenty of available bandwidth to indefinitely expand its High Speed Internet services at speeds up to 3Gbps and believes it has won the legal right to grow its cable business as large as it likes.

Comcast executives admitted Wednesday they have more than enough network capacity to meet the demands of customers, both now and well into the future.

“With regard to usage and capacity, we feel the network is flexible and has plenty of opportunity to grow in capacity,” said Neil Smit, president and CEO of Comcast Cable Communications. Smit was responding to a Wall Street analyst asking about future capacity during a quarterly financial results conference call.

Smit noted that some of the biggest bandwidth users served by Comcast are businesses, and the cable operator was well-positioned to service them by extending fiber or deploying its Metro Ethernet product. Residential customers get increased bandwidth through neighborhood node splitting or DOCSIS 3 channel bonding that combines several channels together to increase speed and capacity.

Brian Roberts, CEO of Comcast Corporation, agreed with Smit, adding, “the more the consumer desires speed, the better that is for our company.”

Roberts noted DOCSIS 3.1 — the next generation of cable broadband — was “promising technology.”

“At the cable convention, we demonstrated 3Gbps” over Comcast’s existing cable infrastructure, said Roberts.

Smit

Comcast is easily the country’s largest cable operator, but many believe it is restrained from growing larger through mergers and acquisitions because of antitrust concerns. But thanks to a number of lawsuits initiated by Comcast, the company believes it can now grow as large as it likes.

Roberts admits the question of cable industry consolidation remains a gray area, particularly for Comcast. But he told investors he does not believe there are any remaining legal hurdles preventing Comcast from buying out other cable operators, despite earlier FCC rulemakings limiting the maximum size a cable company can grow through buyouts.

Comcast yesterday announced its last buyout — NBCUniversal — helped fuel a 29% increase in net income in the second quarter, thanks in part to strong results from film and television.

But many of Comcast’s largest gains came from its cable business.

Despite continued losses of video subscribers (159,000 in the second quarter), Comcast’s cable revenue increased 5.8% to $10.47 billion, and operating cash flow grew 5.7% to $4.3 billion. Comcast, which also owns several NBC broadcast affiliates, is playing for both sides of the retransmission consent wars. Its owned and operated television stations have demanded higher fees to be carried on cable systems, many owned by Comcast itself. The increased programming costs fuel subscriber rate increases, which also boost revenue.

Broadband is way up, although the company keeps losing video customers to cord-cutting.

Comcast’s broadband revenue has continued to grow dramatically. Customer additions for High Speed Internet access were up more than 20% in the quarter — the best second-quarter growth in five years — even as subscribers paid more for the service because of rate increases. Customer growth and price hikes delivered 8% growth in broadband revenue. In the last quarter alone, Comcast earned $2.6 billion from its broadband business.

Comcast is not spending a significant percentage of that revenue on enhanced broadband network upgrades. Instead, the company has increased investments to wire office parks and businesses to entice commercial customers, which account for a substantial amount of new customer growth. Comcast is also investing in research and development of new products and services, such as set-top boxes. The company also expects to pay 10% more in programming costs than it did a year earlier.

Year-to-date cable communications capital expenditures have increased 7.1% to $2.3 billion representing 11.3% of cable revenue. Comcast expects that for the full-year of 2013, cable capital expenditures will increase by about 10% over 2012.

Some other highlights from the quarter:

• In the last six months, Comcast completed broadband speed increases for 70 percent of its customers;
• High Speed Internet revenue was again the largest contributor to Comcast’s cable revenue growth;
• At the end of the quarter, 33% of Comcast’s residential high-speed customers take a higher speed tier above its primary service;
• Comcast has pushed Wi-Fi hard, installing more than four million wireless gateways and boosted Wi-Fi coverage to 250,000 hotspots through both cable partnerships and its home hotspot initiative;
• Comcast’s new X1 cloud-based set-top platform has been introduced to more than half of its national service area and will be available everywhere by the end of 2013. By the end of the year, Comcast also expects to push a firmware update to installed boxes to upgrade them to its new X2 platform;
• The average Comcast subscriber now pays the company $160 per month, up 7.4% from last year. Rate hikes, speed upgrades and growing programming packages account for the higher price;
• 77% of Comcast video customers took at least two products and among those, 42% took phone, broadband and television service.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg Comcasts Cable and Media Units Grow 7-31-13.flv[/flv]

Bloomberg reports Comcast is still having trouble holding on to its video-only customers, but broadband customer growth continues to explode. Comcast also does well because it owns a number of cable networks and entertainment properties. Expect Comcast to continue evolving its products to bring them closer to the things people do online.  (3 minutes)