Craig E. Moffett joined Sanford C. Bernstein & Co. as the Senior Analyst for U.S. Cable and Satellite Broadcasting in 2002.

Craig Moffett, a Wall Street analyst with Sanford Bernstein, is sounding the warning bells that if AT&T and Verizon assign usage caps to their forthcoming LTE wireless broadband services, they will never provide suitable competition for American consumers.

The implications of Internet Overcharging schemes in wireless broadband go well beyond the two companies’ broadband offerings.  Investors expect either AT&T or Verizon to attempt a buyout of DirecTV in the coming months, hoping to pair the satellite service with broadband packages delivered by DSL, fiber, or wireless broadband.  Because many DirecTV subscribers are located in rural areas where even DSL service is often not available, wireless broadband networks would be the most likely means of reaching customers, but not with onerous usage caps.

“If LTE networks are going to be usage-capped, then the last pretense that LTE networks can be positioned as a substitute for terrestrial broadband would seem to be gone,” Bernstein told his clients. “And if LTE can’t be offered as a replacement for wired broadband, then the notion of an out-of-region bundle of DirecTV and LTE is no more.”

Unlike earlier broadband technologies, WiMax, LTE, and other 4G broadband platforms can deliver far more data to subscribers at reduced costs.  With the increased efficiencies offered by the faster networks, carriers can provide customers with considerably more wireless broadband service, unlike heavily capped 3G networks, most of which are limited to 2-5GB of monthly usage before the penalty rates or speed throttles kick in.  While completely unlimited service is unlikely until capacity increases, there is plenty of room to allow customers to access 4G networks without thinking twice about everything they do on them.

Sprint is betting its comeback on its virtually-unlimited Clear WiMax 4G service, now becoming available in an increasing number of cities across the country.  Marketed as a replacement for wired broadband, Sprint is hoping customers will flock back to the carrier, especially if AT&T and Verizon’s 4G LTE offerings are capped.

But AT&T and Verizon have both made noises about usage capping their LTE offerings, if only to increase revenue.  These profit raising Internet Overcharging schemes come despite efforts by the Obama Administration to dramatically increase wireless spectrum available for wireless broadband services.  Dave Burstein from DSL Prime says Federal Communications Commission chairman Julius Genachowski is betting the farm on wireless broadband being the best chance for increased broadband competition.

“The heart of the U.S. broadband plan is to release more spectrum – enough for 10-20 networks like Verizon’s LTE now building – and pray that will be enough competition in five to seven years to check price increases,” Burstein writes.

Making wireless an important substitute for DSL requires raising bandwidth caps from today’s typical 5-10 gigabytes to several times as high as LTE makes the cost reasonable. If Verizon follows AT&T with an abusively low cap of 2-5 gigabytes and Sprint etc. don’t clobber them, the whole broadband plan falls apart because that’s not enough for competition in the future.

I doubt Julius understands this, because he would be doing everything in his power to avoid low caps. It’s just one more strike against “affordable” broadband, like the recent Comcast and Verizon price increases. People need to laugh out loud when Genachowski says “affordable” while tolerating continuous price increases.

Dave Burstein, DSL Prime

While wireless broadband can deliver access to many Americans who have never had broadband service before, it’s not well-positioned to compete for customers seeking to use the next generation of high bandwidth Internet applications.

None of the current wireless services are suitable for high quality video streaming of HD TV shows and movies, a crucial application for many broadband users. Burstein also notes large uploads are painfully slow on Clear’s WiMax network because of limited upstream speeds, but he expects improvements in time, assuming carriers expand with demand.  If not, as more users pile on the next generation wireless networks, their suitability for high bandwidth services becomes even more questionable.

“How much wireless could compete with landlines, especially as all cable connections are moving to 50 meg, was a crucial question for the broadband plan,” Burstein writes. “The consensus of several good engineers is that 4G competes fine with DSL if not many people expect video or other high-bandwidth apps. Wireless certainly can’t keep up if many people want to watch their TV over the net, so it’s only a partial substitute.”

As for AT&T and Verizon, Moffett suspects both may have to take a pass on DirecTV, consumed with fighting against broadband reclassification and Net Neutrality policies in Washington.  Taking on a second battle to run another dog and pony circus to gain regulatory approval for a buyout of DirecTV may be more than they’re willing to deal with at the moment.

As expected, the Federal Communications Commission today voted 3-2 along party lines to move forward with a Notice of Inquiry on Chairman Julius Genachowski’s proposed “third way” of “light touch” regulation to restore the agency’s authority over broadband matters.

A Democratic majority approved Genachowski’s proposal after debate among Commission members.  Democratic Commissioner Michael Copps, long critical of the Bush Administration’s efforts to deregulate broadband, was among the most forceful in calling for some oversight over the industry.  Copps contended that the Bush Administration bent over backwards for large telecommunications companies in unprecedented ways, even stripping away basic consumer protection policies relating to privacy and billing.  The result, he contends, has been a disaster for broadband consumers.

“We need to reclaim our authority,” said Copps. “I, for one, am worried about relying only on the good will of a few powerful companies to achieve this country’s broadband hopes and dreams.”

Copps dismissed rhetoric from industry groups in opposition to the proposal, claiming broadband oversight was not a government takeover or regulation of the Internet.

“We are not talking, even remotely, about regulating the Internet,” Copps said. “We are talking about meaningful oversight of the infrastructure and services that allow Americans to get to the Internet.”

Genachowski’s proposal would correct flawed policy enabled by former Bush Administration FCC Chairman Michael Powell, who supported the classification of broadband as an “information service.”  Powell claimed that classification would include ancillary authority to back FCC enforcement.

That authority would be put to the test.

In 2007, Comcast secretly imposed speed restrictions on customers using peer-to-peer software.  Using the authority Powell claimed the agency had, the FCC ordered the broadband provider to cease and desist its speed throttling. Although Comcast discontinued the practice, replacing it with a 250 GB monthly data cap, the company also sued in federal court a year later, claiming the FCC’s broadband authority was flawed.

Earlier this year, the court agreed, ruling the FCC could not extend ancillary authority under its “information service” classification of broadband.  In that one decision, the FCC lost most, if not all of its oversight powers over broadband matters.

By reclassifying broadband as a “telecommunications service,” the Commission believes it can win back its oversight powers.  The Supreme Court, in an earlier case, upheld similar authority in another matter.

But telecommunications companies have claimed the proposed reclassification would subject broadband providers to 1930’s era regulations established for telephone landline companies.  They objected strongly to today’s vote.

Tom Tauke

Tom Tauke, Verizon executive vice president for public affairs, policy and communications said, “Reclassifying high-speed broadband Internet service as a telecom service is a terrible idea.  The negative consequences for online users and the Internet ecosystem would be severe and have ramifications for decades.  It is difficult to understand why the FCC continues to consider this option.”

Tauke, along with several other phone and cable companies have asked the Commission to turn the matter over to Congress.  Tauke referenced the industry-backed effort that secured nearly 300 signatures from members of Congress opposing reclassification.

But industry critics contend turning the matter over to a polarized Congress would represent a delay at best.  At worst, it could open the door to even more industry-backed, campaign contribution-fueled deregulation.

“There is a real urgency to this because right now there are no rules of the road to protect consumers from even the most egregious discriminatory behavior by telephone and cable companies,” said Markham Erickson, executive director of the Open Internet Coalition, which includes Internet heavyweights like Google and Amazon.com.

Aparna Sridhar, Free Press’ policy counsel said, “The FCC’s Third Way proposal presents a measured response to a problem created by a Comcast lawsuit: Without restoring its authority over broadband, the Commission won’t be able to bring broadband to rural and low-income Americans or promote policies that encourage innovation, creativity, free speech and job creation online. These are goals that we can all agree on, and we support the Commission’s effort to achieve them by first establishing a sound legal foundation for its policies.”

Republican commissioners largely adopted the broadband industry position that any additional regulation would harm investment and hurt consumers.

“I recognize that industry alone will not solve every challenge and no commercial market is perfect, but I fear that a more proactive broadband regulatory approach would adversely affect consumers, competition, and investment,” said Republican Commissioner Meredith Baker, who voted against the proposal.

At least one Republican congressman went all out for the industry in a letter to Genachowski that accused him of engaging in a “blind power grab.”

“Despite overwhelming opposition within a Congress that possesses the actual authority that the FCC covets, the Commission now inexplicably appears poised on Thursday to take another misguided leap towards its investment-suffocating attempt to regulate broadband providers as common carriers,” Rep. Fred Upton (R-Michigan) wrote.

Upton counts AT&T among his top-five contributors, giving the congressman and his leadership PAC $20,000.  Upton also accepted $15,000 from the National Cable & Telecommunications Association, $10,250 from Verizon, $10,000 from Comcast, and $7,500 from Deutsche Telekom, owner of T-Mobile.

Despite all the rhetoric, at least one carrier was forced to live under most of the rules Genachowski proposes for all of America’s broadband providers, with little difficulty.  AT&T agreed to maintain a Net Neutral policy from 2006-2009 as part of its merger agreements with SBC and BellSouth.  While doing so, the company increased investments in deploying its IPTV service U-verse, which included better broadband service for U-verse customers.

Stop the Cap! will provide detailed instructions on how to submit comments to the FCC as part of today’s Notice of Inquiry soon and will hopefully have video of today’s event up shortly.

Pelosi

House Speaker Nancy Pelosi (D-California) is not impressed with the telecom industry effort to oppose Net Neutrality and broadband policy reform.  Pelosi was referring to two talking-point-infested letters sent to FCC Chairman Julius Genachowski opposing Commission efforts to restore regulatory oversight of the broadband industry lost in a recent court decision.

Speaking for the Democratic majority, Pelosi told bloggers the effort was destined to fail unless Democrats suddenly develop a bipartisan streak, long absent in the House, to sign on Rep. Cliff Stearns’ (R-Florida) anti-oversight bill, something she considers unlikely.

“I don’t know how many options they have unless they choose to work with Republicans, but it’s not going to be a Democratic initiative,” she told bloggers on the conference call.  She added:

“Part of the innovation agenda I advocated for when I became Leader was universal broadband. We had hoped to get it done within five years. We just got the bill passed three years ago under President Bush, but we had no funding. Now we want to have the resources to take us to that place so we don’t have a disparity between urban and rural populations. Reclassification, net neutrality, universal access for every American, these are priorities for us. And we see it not in isolation but as part of a new prosperity, as a job creator, to make America healthier, smarter and an international leader.”

Firedoglake reports pro-consumer Net Neutrality advocates have a letter of their own thanks to Rep. Jay Inslee (D-Washington):

The PCCC has a petition to sign in support of Inslee’s letter, as well as a tool to contact your Representative in the House to tell them to get on board. Today, Speaker Pelosi spoke about the need to educate Representatives on why this is so important, so get to it! Pick up the phone and call, and tell your elected official that you want the Internet protected from greedy corporations.

[flv]http://www.phillipdampier.com/video/Heath Shuler Campaign Ad.flv[/flv]

Congress doesn’t seem to know right from wrong, but we do.

It’s not right when big insurance companies write health care laws when millions can’t afford to see a doctor.

It’s not right when big oil companies write energy laws as gas prices skyrocket.

It’s not right when Congress passes trade bills that send our jobs overseas.

Congress won’t change until we change the people we’re sending to Washington.

–Rep. Heath Shuler’s 2006 campaign commercial

That was less than four years ago.  Apparently these days Rep. Heath Shuler (D-North Carolina) believes it -is- right for large telecommunications companies to censor online content, slow down Internet services they don’t want you to use, and allow the phone and cable industry to control broadband policies in this country.

Shuler’s abandonment of his mountain values was made easier with $23,000 in campaign contributions from a grateful industry.

Shuler

When those telecom checks cleared the bank, Shuler went to work for big telecom companies, becoming a leading opponent of consumer-friendly Net Neutrality.

For his supporters who once had high hopes for the Democratic congressman first elected in 2006, it’s been one disappointment after another.

Last fall, Shuler was a co-signer of a letter to FCC chairman Julius Genachowski opposing Net Neutrality.  To reiterate the point, many of the same co-signers of last fall’s letter were back on board with a second letter sent last month.

The latest letter was a godsend to AT&T, Verizon, Comcast, and other Net Neutrality opponents who are using it to suggest there is considerable bipartisan opposition to broadband reform.

Many of his constituents are not impressed with Shuler’s legislative record these days.  One of them is Dave Houck:

I have long since had it with Mr. Shuler.  I admit it, I have no more patience for him.

[…]

I campaigned for you, and phone banked for you, and made cash contributions.  Today I find out that you are against net neutrality, that you signed a letter to the FCC Chairman supporting AT&T and other large corporations — choosing corporations over the people.

In 2010 I will be voting for anybody who runs against you, Democrat or Republican, as you have consistently demonstrated in the three years you have been in Congress that you are quite simply not up to the job of representing the people of Western North Carolina.  You and the “Blue Dog Coalition” are surrogates for corporate interests; you do not have the interests of the people of North Carolina at heart.  Or at least that’s the message you are sending to me.

I’m just fed up.

North Carolina's 11th District is currently served by Rep. Heath Shuler

Similar sentiments from upset residents in his district are voiced all over Shuler’s Facebook page.  Why not add yours?

Then give his office a call or drop him an e-mail.

Ask Rep. Shuler how standing with big phone and cable companies against consumer broadband protection could ever represent western North Carolina mountain values.

Tell him trusting AT&T, Verizon, Comcast, and Time Warner Cable with our broadband future is like trusting BP to protect the Gulf Coast.

Let him know you were disappointed with his decision to sign the first letter opposing Net Neutrality last fall, but now you are simply appalled he’s done it again.

It’s not right when big phone and cable companies have the power to write their own legislation and stop pro-consumer protections like Net Neutrality.  Where is the Rep. Shuler who campaigned on doing the right thing in 2006?

If Shuler won’t change his mind on an issue as important as this, perhaps we need to take his own advice and change the person the 11th district sends to Congress.

Rep. Gene Green (D-AT&T)

The digital divide in broadband has never been just a rural issue.  Some of America’s largest cities are filled with families who cannot afford the prices some broadband providers charge for access.  So it came as quite a surprise that at least eight members of the Congressional Black Caucus (CBC) decided to oppose the Obama Administration’s efforts to move forward on its telecom agenda of better broadband and Net Neutrality.

It also disturbed James Rucker, executive director of ColorOfChange.org, whose 600,000 members are part of America’s largest African-American online political organization.

Rep. Gene Green (D-Texas/AT&T) circulated a letter opposing regulatory intervention in broadband around Capitol Hill looking for additional signatures from members of Congress.  Green’s letter, directed to Federal Communications Commission chairman Julius Genachowski, is the public policy equivalent of a biggie-sized series of lies, distortions, and misrepresentations.  Green is so proud of his efforts, constituents can’t find word one about it on his website. Instead, Green claims he is working “to expand Internet access and improve Internet competition, in order to reduce access prices and close the ‘Digital Divide’ between those online and those who are not.'”

Sure he is.

ColorOfChange urged members of Congress not to co-sign Green’s letter:

This letter is not the first time we’ve seen deceptive language or outright misinformation used to advocate against protecting network neutrality. In fact, the telecom industry has for years been engaged in a well-coordinated and massively funded campaign to intentionally misinform the public, Congress, and public interest groups about net neutrality, successfully confusing the issue to their advantage. The industry has spent millions of dollars on advertising, public relations, and lobbying efforts — using industry front groups, ads in Capitol Hill newspapers, and lobbyists. Sadly, the industry in recent years has also managed to enlist members of Congress and advocacy organizations rooted in communities of color to echo misleading and false arguments about net neutrality. This too has been a concern for many ColorOfChange members and has been the subject of our campaign work. While it has a right to engage in the public discourse about this issue, the telecommunications industry has demonstrated a disinterest in honest debate, spreading misinformation that plays on ignorance about the issue, and the somewhat confusing, technical language that surrounds it.

Several of the advocacy groups involved take substantial contributions from telecom companies — notably AT&T and Verizon, or have telecom interests serving on their board of directors.  When a minority advocacy group suddenly starts parroting AT&T, Verizon, or Comcast talking points, just follow the money.

Unfortunately, 74 Democrats, including eight members of the CBC aren’t listening to ColorOfChange or their constituents, and co-signed Green’s letter.  James Rucker notes:

Last week, I urged black members of Congress not to sign this letter. But we quickly learned that Representatives G.K. Butterfield (D-NC), Yvette Clarke (D-NY), Lacy Clay (D-MO), Alcee Hastings (D-FL), Eddie Bernice Johnson (D-TX), Greg Meeks (D-NY), Bobby Rush (D-IL), and Bennie Thompson (D-MS) didn’t get the message.

Those wondering why these eight members were in such a hurry to disconnect their constituents’ interests need only consider the enormous campaign contributions sent to them by the phone and cable industry:

Source: Opensecrets.org

That’s only for this year — and we’re only five months into 2010.  Co-signing Green’s letter could add an extra zero to the amount on the next check.

Rep. Green himself is no stranger to campaign contributions from telecom companies.  So far in 2010, he’s accepted money from both AT&T, Verizon, and the National Cable & Telecommunications Association.  Since 2000, every time a major public policy debate fires up over telecommunications issues, AT&T (and its predecessor SBC) increased the amount on Green’s check.  During the 2004-2006 cycle, when SBC sought a merger with AT&T, SBC contributed $11,500 to Rep. Green.  During the first round of the battle to secure Net Neutrality in 2006-2007, AT&T was Green’s top donor with a $15,000 contribution.

ColorOfChange.org today announced a new campaign directed towards the eight CBC members who co-signed Green’s letter.

“Our members are deeply concerned that by signing Green’s letter, black members of Congress are taking a stance that fails to secure our digital rights,” said James Rucker, executive director of ColorOfChange.org. “Some CBC members have perhaps signed Rep. Green’s letter without fully understanding what is at stake while others seem to know, but are serving other interests. There is a significant correlation between those leading the charge and those accepting significant contributions from the industry which stands to benefit from the FCC being rendered impotent. In either case, our members are eager to make clear how important this issue is to our community and to Americans in general, and to explain why they see this as a 21st century civil rights issue.”

The group is calling on members to place more than 1,750 phone calls to all eight representatives, urging they stop representing the interests of phone and cable companies and start representing the interests of their constituents.  ColorOfChange is asking everyone to ask these members to promptly remove their names from Rep. Green’s letter, which represents little more than propaganda talking points from big telecom.

Last month, a federal court removed the FCC’s authority to enact the most basic consumer protections over broadband given its current classification, which was decided upon by a previous set of commissioners. The court ruled that the agency did not have the authority to institute the desired protections while broadband was designated an information (or Title I) service, over which the FCC has limited jurisdiction. The ruling prevented the FCC from implementing proposed rules on network neutrality and cast a cloud of uncertainty over its authority to implement portions of the National Broadband Plan intended to close the digital divide.

Earlier this month, the FCC announced it would reassert its authority to enact limited regulation of broadband by reclassifying it as a communication (or Title II) service. In response, telecommunications industry lobbyists have stepped up their efforts to influence lawmakers. Rep. Green’s letter parrots long-debunked arguments that serve the interests of major industry players and threaten the FCC’s ability to make rulings that would expand broadband access.