Obama

In his State of the Union address last night to Congress, President Barack Obama complained that America’s digital infrastructure is inadequate to allow entrepreneurs and small businesses to successfully market their goods and services over the Internet.

“So much of America needs to be rebuilt. We’ve got crumbling roads and bridges, a power grid that wastes too much energy, an incomplete high-speed broadband network that prevents a small-business owner in rural America from selling her products all over the world.

During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge. After World War II, we connected our states with a system of highways. Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.

In the next few weeks, I will sign an executive order clearing away the red tape that slows down too many construction projects. But you need to fund these projects. Take the money we’re no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.”

President Obama also touched on the problem of online piracy and imported counterfeit goods.  Last week, controversy over online piracy legislation including the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA), brought consumer opposition to both, temporarily shelving the measures.  But the president acknowledged the problem was not going away.

“It’s not right when another country lets our movies, music, and software be pirated,” he said. “Tonight, I’m announcing the creation of a Trade Enforcement Unit (TEU) that will be charged with investigating unfair trading practices in countries like China. There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders.”

Upton

Republicans fired back at the president over his rural broadband remarks, accusing the administration and the Federal Communications Commission of supporting pre-conditions on forthcoming spectrum auctions.  One House committee chairman tasked with broadband issues said the FCC was supporting policies that could reduce auction proceeds by reserving certain frequencies for up-and-coming wireless competitors or restrict how much spectrum a current market leader like AT&T or Verizon Wireless could acquire.

“The President said we have an incomplete high-speed broadband network, but his Federal Communications Commission is protecting its turf instead of joining us to free up airwaves to build the next generation communications networks,” said House Energy & Commerce Committee chairman Rep. Fred Upton (R-Mich.).

FCC chairman Julius Genachowski has had little regard for the House Republican-backed proposal that could potentially tie the FCC’s hands to set rules for spectrum auctions.  House Republicans also oppose setting aside certain spectrum for free, unlicensed high-power Wi-Fi use, preferring to auction as much spectrum as possible.

Earlier this month, Upton blasted the FCC chairman for opposing a “winner take all” auction approach:

“Bluster aside, it sounds like we have a federal agency more concerned about preserving its own power than offering serious improvements as we prepare to finalize this legislation. We worked with the FCC’s auction experts to give the agency the legitimate flexibility it needs to design the mechanics of the auction. It’s time to stop the FCC from engaging in political mischief that will hurt competition and steal money from the taxpayer’s coffers. Don’t take our word for it – look at the 2008 auction. The FCC imposed conditions on the C and D blocks that ultimately prevented the D-block from selling and pushed smaller carriers out of the auction. Taxpayers lost somewhere in the neighborhood of $5 billion, and spectrum remains sidelined. And speaking of protecting taxpayers, it’s time for the FCC and others to be honest about how taxpayers would be affected by their plans to give away valuable spectrum to favored constituencies. Our goal is to strike the right balance by keeping plenty of opportunity for unlicensed use without forcing taxpayers to forfeit any return on a resource that everyone agrees is worth billions.”

Courtesy: WCVB Boston

Correction: In an effort to concatenate two stories regarding Springfield, we erred in reporting about Springfield’s move to sell its municipal cable operation to Knology.  That story referred to Springfield, Fla., not Springfield, Mass.  We appreciate one of our readers bringing this to our attention, and we regret the error. –PMD

Comcast customers in Massachusetts are hopping mad over the latest round of rate increases from the state’s largest cable operator — the second in 10 months in some areas.  Higher cable bills for customers will start arriving by early spring.

City officials in Boston expect eastern Massachusetts customers will face up to 2.9% more for basic service this spring.  In western Massachusetts, Springfield city officials finally resolved a prolonged legal battle with the cable operator and granted the company a 10-year franchise renewal that preserves senior discounts for existing customers.

Boston mayor Thomas M. Menino said an examination of Comcast’s cable rates over the past few years proves deregulation “has failed” consumers across greater Boston.  Menino says basic cable rates have increased by 80 percent in the three years since the city’s rate control agreement expired.

Menino wants restored authority to regulate cable rates, and has asked the FCC for permission to bring back the city’s oversight powers.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WCVB Boston Cable Rates Going Up For Some Customers 1-17-12.mp4[/flv]

WCVB in Boston talks with city mayor Tom Menino about the latest round of rate increases for Comcast customers.  Some Boston locals are responding by dumping cable television altogether.  (2 minutes)

Comcast basic service will rise another 4.9 percent this spring, bringing the mostly local-broadcast-channel cable service to $16.58 a month.

The only other major cable provider in Boston, RCN, which serves mostly apartment buildings and other multi-dwelling units, is not planning to increase its prices on the lowest price tier. However, RCN already charges more than Comcast — $17.50 — for comparable service.  Other RCN customers face general rate increases this spring.

Verizon says it has no plans to increase prices in Boston either.  That statement was deemed ironic by some, considering the fact the phone company has never provided FiOS fiber-to-the-home cable service inside the city of Boston.

All affected providers blame increasing programming costs for the rate hikes.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/WGGB Springfield Cable Rates Going Up 1-18-12.mp4[/flv]

WGGB in Springfield led a recent evening newscast with news Comcast and competing satellite providers are increasing rates in western Massachusetts, with local residents increasingly questioning the value of their cable-TV services.  (2 minutes)

McDowell

Republican FCC Commissioner Robert McDowell is questioning whether Comcast misled the federal agency when the cable company acquired wireless spectrum it now says it had no intention of ever using.

McDowell was reacting to Comcast chief financial officer Michael Angelakis, who admitted this week his company really never had any interest in competing in the wireless space.

“Were they purchased under false pretenses?” McDowell asked.

Comcast has since sold their acquired spectrum to Verizon Wireless, which in Angelakis’ view makes sense.

“We never really intended to build that spectrum, so therefore it’s a really good use of that spectrum,” Angelakis said.

That admission puts Comcast in a difficult position, because FCC rules mandate that companies acquiring scarce wireless spectrum make a good faith effort to use it.  In McDowell’s view, had Comcast never intended to put the frequencies to use, the FCC probably would have disallowed the acquisition.

Verizon Wireless also plans to pick up unused spectrum originally acquired by Time Warner Cable in a deal that would let both companies cross-promote cable and wireless products and avoid head-on competition.

Both Comcast and Time Warner Cable have warehoused unused spectrum for several years.  Neither company appeared serious about building competing wireless networks, and with the spectrum off the market, would-be competitors couldn’t launch service either.

Verizon agreed to pay $3.6 billion to acquire the cable industry-owned spectrum, which it intends to use to bolster its LTE 4G network.

The FCC is now seeking public input on whether it should approve the spectrum sale. The Justice Department is also considering its antitrust implications.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WHP Harrisburg Free cell phone program 1-5-12.mp4[/flv]

WHP-TV in Harrisburg, Penn. has been running several stories about the FCC’s Lifeline program, which hands out free cell phones to those living below the poverty line.  While the FCC defends the Lifeline cell phone program as delivering needed phone service for job-seekers and as a landline replacement, some citizens who consider cell phones a luxury are upset the federal government is subsidizing the project at a cost of $1.3 billion a year.  Even more disturbing to some is the reported amount of waste, fraud, and abuse that may be delivering free phones to those who don’t deserve them.  The anchor’s thinly-disguised editorializing leaves little doubt he considers the program a waste of money at a time of skyrocketing budget deficits. (Warning: Loud Volume)  (2 minutes)

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WHP Harrisburg Possible free broadband 1-10-12.mp4[/flv]

WHP ran this follow-up story about the FCC’s forthcoming involvement in “free broadband” for the poor.  In fact, the subsidized Internet program would likely deliver 1-3Mbps basic Internet service for around $10 a month.  The WHP anchor doesn’t seem too impressed with this part of the Lifeline program either.  (Warning: Loud Volume)  (2 minutes)

Assurance Wireless, owned by Sprint, delivers Lifeline cell phone service to low income Americans.

Low income Americans may soon be able to obtain substantial discounts on broadband Internet service as part of an expansion of the Lifeline program, which currently provides subsidized landline and cell phone service.  The Federal Communications Commission is considering the future of the program, which currently focuses on basic telephone service, but could soon be expanded into broadband.

But before that can happen, the Lifeline program itself must undergo a comprehensive review process, according to FCC Chairman Julius Genachowski.

The FCC admits the program is overdue for reform. Recent investigations found billions in potential savings from the elimination of significant waste, fraud, and abuse.

The most costly problems appear to be coming from the recently introduced subsidized cell phone program, which hands out free or extremely low-cost cell phones to poor Americans, paid for by other ratepayers as part of the “Universal Service” surcharge.  Recent audits found many recipients double-dipping or worse, signing up for free cell phones for individual family members while already receiving a separate landline discount.  Under FCC rules, Lifeline recipients are supposed to receive a single subsidy per household, either for cell phone or landline service, not both.  But in several cases, informal audits found families with multiple cell phones, some handed out to children.

The FCC only recently decided to create an Accountability Database to track Lifeline program benefits.  Scammers have used loopholes to sign up those unqualified to participate, and some customers have obtained cell phones from multiple providers, a violation of the rules. Ratepayers could save nearly $2 billion annually once ineligible accounts are closed and the double-dipping has been stopped.  Some of those savings can be used to help defray the costs of Lifeline broadband, a potential new program that could deliver basic broadband service to low income households for around $10 a month.

Currently, a handful of cable and phone companies offer a similar service to those families who qualify for subsidized school lunches.  The FCC is analyzing data collected by providers like Comcast to help build a model program not affiliated with any single provider.

Genachowski said the program will not only help defray the costs of broadband service, but also get low-cost computers and training into the hands of needy families.

One of the most commonly-reported reasons why consumers do not adopt broadband service is its relatively high cost.  Most low-income broadband programs deliver basic 1-3Mbps service, but only to families with school-age children.

[flv]http://www.phillipdampier.com/video/FCC Lifeline.flv[/flv]

The FCC produced this video explaining the Lifeline program, who is eligible, how it works, and how to sign up.  (8 minutes)