AT&T's "Fair Deal" website claims the company is fighting for lower programming costs.

Programmers trying to play hardball over fees paid by cable, satellite, and phone company providers occasionally get the ball thrown back at them, which is precisely what happened Friday when Scripps-Howard found their popular networks thrown off of AT&T’s U-verse, even though the companies had agreed on financial terms.

At issue — AT&T wants to distribute programming it pays for over new mediums, ranging from video on demand, online viewing, and even wireless watching through smartphone applications.  If programmers want more money, AT&T argues, they’d better also be willing to deal on how that programming gets watched.

When Scripps’ officials demurred Friday morning, AT&T simply pulled the plug on Food TV, HGTV, the Cooking Channel, as well as lesser-watched Great American Country and DIY Networks.

Scripps’ officials hurried out a statement:

“Let me start by saying this impasse is not about money,” said John Lansing, president of Scripps Networks. “We reached an agreement in principle with AT&T U-verse on the distribution fees we would receive for these networks well in advance of last month’s contract deadline.”

“AT&T U-verse demanded unreasonably broad video rights for emerging media where business models have not even been established,” Lansing said. “Accepting their demands would have restrained our ability to deliver our content to our viewers in new and innovative ways.”

Food Network President Brooke Johnson threw a HissyFit, claiming AT&T yanked the channels while the two sides were still at the negotiating table.

As Friday wore on, both sides defended their respective positions.  Scripps’ saw AT&T’s actions as nothing short of a Pearl Harbor sneak attack.  AT&T claimed Scripps was pulling a flim-flam — trying to stick the phone company with an inferior deal that restricted how they can use the basic cable networks, all at prices higher than their cable competitors were paying.

But when Lansing claimed the dispute was not about money, reality was also yanked from the lineup.  When a cable company or programmer tells you it is not about the money, it is all about the money.

Scripps reactivated their "Keepmynetworks.com" website to fight another programming fee battle

Johnson told the Chicago Tribune AT&T was trying to negotiate for broad usage rights of their programming for services that don’t even exist yet.

“They are asking for broad, unlimited distribution on non-linear platforms that go well beyond emerging media technologies. It’s anticipatory and it’s without a business model,” Johnson said.

Such agreements could end up haunting Scripps if a new money-making distribution scheme evolves that AT&T can use -and- get to keep all of the profits.

Cable companies might also be unhappy if AT&T won concessions they themselves don’t have.

Re-purposing video content into on-demand or portable viewing could evolve into a multi-million dollar business, especially if consumers begin deserting cable TV packages that include dozens of unwatched channels.  Cable cord-cutters could end up watching Food TV shows online, and who benefits financially from that is ultimately the issue here.

A weekend without the networks on U-verse was apparently enough for both sides, who pounded out an agreement announced yesterday evening, restoring the networks.

It was all-smiles for both sides:

Brian Shay, senior vice president of AT&T U-verse, said, “It was important to us on behalf of our customers to come to a positive resolution as quickly as possible. We appreciate everyone’s willingness to make that happen, working diligently over the weekend, so the situation wasn’t prolonged, and we thank our customers for their support and patience while we reached a fair deal.”

From Scripps:

“AT&T U-verse customers, we have been overwhelmed by your loyalty and support of HGTV and our other networks – DIY, Food Network, Cooking Channel and GAC. Your voice has been heard and we are very close to getting our networks back on AT&T U-verse.  We hope to have more good news for you soon.”

Terms of the new agreement were not disclosed, but you can be certain it includes a higher price tag for the bouquet of Scripps’ networks that will eventually appear on future AT&T U-verse bills.  But at least the cable networks avoided the fate of the Hallmark Channel, kicked off U-verse Sept. 1st and is still off as of today.

[flv width=”512″ height=”308″]http://www.phillipdampier.com/video/WDAF Kansas City Cable Customers Lose Channels 11-8-10.flv[/flv]

WDAF-TV in Kansas City covers the weekend loss of Food TV and other cable networks on AT&T U-verse over another programming fee dispute.  (2 minutes)

Get used to seeing this screen because we saw it for minutes on end when testing Time Warner's new Remote DVR service.

Time Warner Cable has launched its free Remote DVR programming service throughout the country, allowing customers to remotely manage their DVRs from the cable company’s website or through a smartphone application.

Stop the Cap! gave the service a test run this morning to see how well it works.

Here are some of our early impressions using the online, web-based interface (we did not test the smartphone application):

1.  The service is in beta and it showed.  Our first attempt to use the system this morning was laboriously slow, taking 30 seconds or more to change pages.  Things worked better as the morning progressed, but it still suffers from sluggish responsiveness.  Several features failed for us occasionally, such as deleting some scheduled recordings remotely.  After two minutes or more of waiting, we gave up.

2.  The application was generally intuitive and we did not need a lot of hand-holding to get started. But at the same time, the usefulness of the application itself was limited.  Scrolling through the online program grid was as tedious as the using the television version.  It’s fine if you know exactly what you want to watch and what channels to check, but terrible for browsing through hundreds of channels.

3.  The search and browse functions are far too limited to be useful.  It is impossible, for instance, to search just for movies.  Categories are too broad to be of much use, and many are missing.  “Drama” and “Action” included everything from a documentary to a series to a movie.  Netflix succeeds where Time Warner fails.  Their search categories are much better — documentaries, TV series, horror, foreign and classic films, and many more make it far easier to drill down to the type of show you want to see.  Netflix even offers sub-categories, helping people find similar programs to watch they never realized were available.

4.  Changing the name of the DVR from its hexadecimal default did not work consistently.  When we tried to rename ours to “Living Room,” sometimes it appeared that way, other times it defaulted back to the cryptic “DVR 00:xx:92.E9.xx.xx” (we replaced some numbers and letters with “x”).

5.  The more scheduled recordings you have, the more ponderous the application seemed to work.  We tried deleting some series (which did not always work either) and it helped responsiveness.  If you use your DVR a lot, you may find using Remote DVR a patience-testing experience.

6.  There did not seem to be an indicator as to how much recording space you have remaining or what is already stored on your DVR.

Time Warner customers who use smartphones and other Web-enabled mobile devices can access “Remote DVR Manager” at mdvr.timewarnercable.com.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/TWC Introducing Remote DVR.flv[/flv]

Time Warner Cable produced this video to help introduce customers to its Remote DVR service, explaining how to register and get started with the free service.  (1 minute)

Fashionably late, Verizon Wireless intends to change its wireless smartphone data plans to end unlimited usage in the next four to six months, according to Verizon CEO Ivan Seidenberg.

Seidenberg said Verizon Wireless’s new data plans, which he says will probably arrive in time for the holiday shopping season, will differ from AT&T’s but he refused to elaborate.

“We’re not sure we agree yet with how they valued the data,” he said at an investor conference Thursday.

The change has been widely anticipated in the wireless industry, as Verizon Wireless and AT&T, the nation’s largest and second largest carriers, charge nearly identical pricing for their wireless services.  Both carriers formerly charged smartphone customers $29.99 per month for unlimited wireless usage.  AT&T eliminated unlimited usage with two new plans unveiled in June with the introduction of the latest Apple iPhone.  One charges customers $15 a month for up to 200Mb of usage, and another charges $25 for up to 2GB of usage per month.  Customers exceeding the limits pay $15 for an additional 200Mb or $10 per gigabyte in additional fees.

Critics charge Verizon’s decision to slap usage limits and overlimit fees on customers is just another attempt to gouge wireless customers, made possible by the two providers’ market power.

Wall Street Journal reader Candace Kalish commented on the new limited usage attitude Verizon seeks to embrace:

What the carriers want is a tiered system with outrageous penalties for slight overages. The banks, car renters, airlines, and credit card issuers do very well with this. It is the most profitable business model since it requires careful underuse or disproportionate costs on the part of their customers. This is why they require people to guess their usage and impose punitive marginal costs on single byte transfers.

[…]I think the carriers’ actions indicate a much greater concern with short term profits rather than long term innovation and even great profitability.

[…]Since carriers impose rates on a take it or leave it basis, I don’t see rates improving much in the near future. I’ll stick with my ancient $30 a month plan and a cheap flip phone with an iPod Touch. When competition kicks in, possibly in the next 10 to 20 years, and they offer more for my money, I’ll consider a smarter phone. Right now the market is still what they used to call a natural monopoly, and the pricing structure proves it.

Seidenberg

Seidenberg made it clear the new Internet Overcharging schemes will arrive in time for the company’s introduction of its fourth generation data network – Long-Term Evolution, more commonly known as LTE.  Earlier, Verizon hinted to its investors it intends to market its LTE service at a premium price, anticipating customers will be willing to pay a higher price for faster service.  This, despite the fact LTE will deliver Verizon dramatically increased capacity at a lower overall cost, in terms of bang for the spectrum buck.

Company officials are still considering whether LTE pricing will carry a per megabyte charge with little or no usage allowance or a more common usage allowance plan with overlimit fees.  Either way, few expect wireless will offer an effective competing alternative to wired broadband service, unless one’s monthly usage is below 5GB.  Above that amount, overlimit fees could quickly accumulate, leaving customers with wireless bill shock.

Dave Burstein, publisher of DSL Prime, commented back in January about wireless data pricing:

Charging at the this level, if the other wireless carriers go along, is a blatant attempt to protect their other services. [A government agency] filing points out the likely reason: “The Commission also must keep in mind that the two largest US wireless providers, Verizon and AT&T, also offer wireline services in major portions of the country, raising the question of whether these providers will market these services as replacements for wireline services.”

If his prices carry the day, the […] broadband plan will accomplish very little. The [plan] implicitly counts on wireless for competition, because new wired networks are highly unlikely and their plan doesn’t change that. Wireless voice in the U.S. is a weak cartel, data a relatively strong cartel. [Verizon’s] signals may inspire the other carriers to also drastically cut the basic data allowance.  Or not.

If there’s a significant cut in the 5GB wireless allowance, then the broadband plan needs a huge redirection to measures that work [in] a telco-cable duopoly. That’s so tough I don’t know if Washington can do that.

Thanks to our regular reader Bones for sending word.

AT&T wireless broadband customers who thought they could survive a smartphone data plan with only a 200MB usage allowance are discovering $15 overlimit fees applied to their bill because of mystery data usage consumed while they were asleep.

Stop the Cap! reader Pat dropped us a note to say she accumulated a whopping $45 in overlimit fees on her August bill for her family’s three iPhones because they exceeded their 200MB usage allowances while the family was unconscious:

At around 2AM most mornings, our phones regularly show usage of around 5-10MB each even though they are being charged and are not used by anyone in the family.  At first my husband thought an application on the phone was automatically exchanging data so we tried switching off 3G access and relied exclusively on Wi-Fi access, to no avail.  Sure enough, for the next seven days in a row, the phones all used between 5-10MB of usage.  We tried disabling and removing various applications and told others only to communicate manually.  That didn’t work either.  The mystery usage remained.

We contacted AT&T multiple times about this issue, because this usage easily put us over the limit, at which point AT&T bills a $15 penalty to buy you another 200MB of usage.  We got a lot of excuses, one month’s credit, but no answers.  One representative used the opportunity to try and upsell us on the 2GB plan to “avoid this from happening.”  It sounds like a nice scam.

Pat, it turns out this has been a significant issue for many AT&T customers dating back to the June introduction of the usage-limited smartphone data plans from AT&T.  We found threads on both AT&T and Apple’s websites running well into the dozens of pages, with nobody getting a definitive, consistent answer as to why this keeps happening.

In late July, the folks at Gizmodo got a statement from AT&T about the problem:

This is a routine update of your daily data activity on your device to ensure the accuracy of your data billing. Customers are not charged for data usage, given that no data session is generated. It’s not uncommon for devices that are ‘always on’, like iPhone, to process data event records for billing purposes after a certain amount of inactivity or after long periods of time. It’s also separate from how our system lets you monitor your data consumption.

Unfortunately, it’s also apparently inaccurate because subsequent comments indicate customers were, in fact, billed for that usage.

Customers have been told a variety of things to justify AT&T’s usage billing:

1. It’s an application on your phone polling for data and/or updates;
2. Your phone is sending and receiving e-mail;
3. If your phone goes “to sleep” it switches away from Wi-Fi and back to AT&T’s 3G usage, incurring data usage fees;
4. In the early morning, AT&T communicates with phones to exchange updates and data;
5. The usage reports represent cumulative usage made during the day but only later reported to AT&T;
6. It’s iTunes diagnostic information you agreed to share with Apple being sent to them every night;
7. It’s Apple’s fault.

The biggest problem? AT&T’s stingy usage allowances.  Many customers do not understand what a megabyte represents, but 200 of them sounds like a lot… until you browse to a page with multimedia content or utilize an application that exchanges a lot of data during the day.  AT&T has really not addressed the problem, other than to throw $10 credits to customers who complain the loudest.  Many just upgrade to the higher priced 2GB plan and hope the problem goes away.

AT&T’s Internet Overcharging scheme for wireless has trained customers to use less of a service they pay good money to receive:

• Customers think twice before installing and using data applications that could consume too much of their allowance;
• Customers train themselves to jump off of AT&T’s 3G network and switch to Wi-Fi wherever possible, despite paying for AT&T’s wireless data network;
• Customers quickly learn paying more for a more “generous allowance” is a “better value,” saving them the time and hassle of worrying about overlimit fees;
• Customers can complain all they like, but in the end they’ll grumble and pay the bill, facing exorbitant early termination fees if they want out of AT&T’s fee maze.

Unfortunately, without a team of lawyers or regulatory agencies breathing down AT&T’s neck to deliver a credible response to these overcharges, they are very likely to continue.  Although AT&T claims the 200MB usage plan was designed to save customers money and attract new users to smartphones, it’s no mistake the cheapest plan delivers a minuscule allowance.

The company knows very well that smartphone data usage increases as the phones and the software that runs on them become more sophisticated.  Customers delivered a tasty sample of 3G usage are likely to enjoy it and find themselves upgrading to a more profitable data plan with a comparatively larger allowance.  If they don’t, AT&T wins again because customers face paying at least $30 for 400MB of usage, even though a 2GB plan would have only set them back $25.

For now, the best we can recommend is completely powering off the phone overnight and seeing if it still incurs any phantom charges.  You should also complain, regularly and loudly, to AT&T each time it happens.  Contact your state Attorney General and file a complaint if AT&T’s answers are unsatisfactory and urge their office to begin an investigation.

As Stop the Cap! has said from day one, Internet Overcharging schemes force customers to spend time and energy doublechecking usage gauges that may or may not be accurate and make you think twice about everything you do online, wondering what it will ultimately do to your bill at the end of the month.  It’s all a win for service providers, who get the benefit of conservative usage from the “think-twice” mindset and revenue enhancing overlimit fees from those who never worry.  You lose either way.

When Alltel announced the sale of its wireless business to Verizon in 2008, few Alltel customers could have foreseen they’d technically end up changing cell phone providers not once, but twice.  That’s because the federal government ordered Verizon to sell off Alltel’s assets in communities where Verizon already had a substantial market share.  For the sake of competition, the majority of Alltel customers in 18 states affected by the federal government divestiture order will become AT&T customers shortly.

That poses a problem because Alltel’s network and phones use CDMA network technology.  AT&T uses a different standard called GSM.  The two standards are not compatible.  Since AT&T has no intention of operating a CDMA network for Alltel customers, once AT&T converts Alltel’s cell sites to operate on its own network, every Alltel customer will be left with phones and equipment that will no longer work.

To make the deal work, AT&T has agreed to provide, at no charge, comparable brand new phones and other equipment to Alltel customers being moved to AT&T’s network.  No new contract is required, and customers will not be forced to extend one to receive the new AT&T equipment.

But that deal doesn’t extend to handing out free iPhones to Alltel customers.  If you want one of those, you will have to pony up the same money every other AT&T customer pays, and sign a new two-year contract.

This week, AT&T announced it was speeding up the transition, and many customers will be choosing new free phones around the end of this year or in early 2011.  Originally, AT&T expected it would take until mid-2011 to complete network conversions.  Complete details can be found on the AT&T-Alltel Transition Website.

For residents in the north-central United States, the iPhone craze has been something other Americans have experienced.  For much of the Dakotas and Montana, the transition will bring the first opportunity to get the popular smartphone at the subsidized price AT&T offers all of its customers on contract.

The implications of AT&T’s imminent arrival in the area doesn’t seem to bother the other dominant provider – Verizon Wireless.  In South Dakota, AT&T’s entry into the market may cause some to switch to AT&T, if only for the iPhone.  But Karen Smith, spokeswoman for Verizon Wireless in the Great Plains region, says Verizon is confident with the lineup of phones it already offers and remains the nation’s largest wireless carrier even without the iPhone.

Current Verizon customers like Jill Garrigan of Rapid City told the Rapid City Journal she’d consider switching to AT&T to grab the iPhone, but she’d much prefer buying one from Verizon Wireless.

“If Verizon carried the iPhone, I’d probably consider getting it from Verizon,” Garrigan said.

Many other South Dakotans share concerns about the higher monthly wireless bills the iPhone brings, and they’re not interested in paying a lot more just to own one.

Garrigan’s friend, Jessica Simon, said she’ll keep her current Samsung phone, thank you very much.  The reason?  “It’s all the additional money and all the surcharges,” she told the newspaper.

But local cell phone dealers believe the arrival of Apple’s iPhone will cause a sensation across the region, and they’ve already fielded calls from customers anxious to acquire one.

Stop the Cap! has created a map showing the areas due for early conversion for your convenience.

Areas shaded in red are scheduled for early conversion to AT&T's GSM Network (click to enlarge)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Alltel ATT Transition Ahead of Schedule 9-4-10.flv[/flv]

Stop the Cap! has compiled news reports from across the region regarding the AT&T-Alltel transition and its impact on states including the Dakotas, Montana and Wyoming.  Clips courtesy of WDAY-TV Fargo, N.D., KGWN-TV Cheyenne, Wyo., KECI-TV Missoula, Mont., and KFYR-TV Bismarck, N.D. (4 minutes)

Upgrade Specifics

The following counties are on AT&T’s early upgrade list (RSA=Rural Service Area):

Alabama: Greater Dothan area and RSA 7 including Butler, Coffee, Covington, Crenshaw, Geneva and Pike Counties.

Arizona: RSA 5 including Gila and Pinal Counties.

Colorado:  RSA 4 includes Chaffee, Custer, Fremont, Lake and Park Counties. RSA 5 includes Cheyenne, Elbert, Kit Carson and Lincoln Counties. RSA 6 includes Dolores, Hinsdale, La Plata, Montezuma, Ouray, San Juan and San Miguel Counties. RSA 7 includes Alamosa, Archuleta, Conejos, Mineral, Rio Grande and Saguache Counties. RSA 8 includes Bent, Crowley, Kiowa, Otero and Prowers Counties. RSA 9 includes Baca, Costilla, Huerfano and Las Animas Counties.

Michigan: Greater Muskegon area and RSA 5 includes Benzie, Lake, Leelanau, Manistee, Mason, Missaukee, Osceola and Wexford Counties. RSA 7 includes Gratiot, Isabella, Mecosta, Montcalm and Newaygo Counties.

Montana: Greater Billings and Great Falls areas and RSA 1 includes Flathead, Glacier, Lake, Lincoln, Pondera, Sanders and Teton Counties. RSA 2 includes Blaine, Chouteau, Hill, Liberty and Toole Counties. RSA 4 includes Daniels, Dawson, McCone, Richland, Roosevelt, Sheridan and Wibaux Counties. RSA 5 includes Granite, Lewis and Clark, Mineral, Missoula, Powell and Ravalli Counties. RSA 6 includes Broadwater, Deer Lodge, Jefferson, Judith Basin, Meagher, Silver Bow and Wheatland Counties. RSA 7 includes Fergus, Golden Valley, Musselshell, Petroleum, Stillwater and Sweet Grass Counties. RSA 8 includes Beaverhead, Gallatin, Madison and Park Counties. RSA 9 includes Big Horn, Carbon, Rosebud and Treasure Counties. RSA 10 includes Carter, Custer, Fallon, Powder River and Prairie Counties.

New Mexico: Greater Las Cruces area and RSA 1 includes Cibola, McKinley, Rio Arriba, San Juan and Taos Counties. RSA 5 includes Grant, Hidalgo and Luna Counties. RSA 6 includes Chaves, Eddy, Lee, Lincoln and Otero Counties.

North Dakota: Greater Fargo, Grand Forks, and Bismarck areas and RSA 1 includes Burke, Divide, McLean, Mountrail, Renville, Ward and Williams Counties. RSA 2 includes Benson, Bottineau, Cavalier, McHenry, Pierce, Ramsey, Rolette and Towner Counties. RSA 3 includes Barnes, Dickey, Griggs, LaMoure, Nelson, Pembina, Ransom, Richland, Sargent, Steele, Traill and Walsh Counties. RSA 4 includes Adams, Billings, Bowman, Dunn, Golden Valley, Grant, Hettinger, McKenzie, Mercer, Oliver, Sioux, Slope and Stark Counties. RSA 5 includes Eddy, Emmons, Foster, Kidder, Logan, McIntosh, Sheridan, Stutsman and Wells Counties.

South Dakota: Greater Sioux Falls and Rapid City areas and RSA 1 includes Butte, Harding, Lawrence and Perkins Counties. RSA 2 includes Campbell, Corson, Dewey, Potter, Walworth and Ziebach Counties. RSA 3 includes Brown, Edmunds, Faulk, McPherson and Spink Counties. RSA 4 includes Clark, Codington, Day, Deuel, Grant, Hamlin, Marshall and Roberts Counties. RSA 5 includes Custer, Fall River and Shannon Counties. RSA 6 includes Bennett, Gregory, Haakon, Jackson, Jones, Lyman, Mellette, Stanley, Todd and Tripp Counties. RSA 7 includes Aurora, Brule, Buffalo, Charles Mix, Davison, Douglas, Hand, Hughes, Hyde, Jerauld and Sully Counties. RSA 8 includes Beadle, Brookings, Kingsbury, Lake, Miner, Moody and Sanborn Counties.RSA 9 includes Bon Homme, Clay, Hanson, Hutchinson, Lincoln, McCook, Turner, Union and Yankton Counties.

Virginia: Greater Danville, Norton and South Hill areas and RSA 1 includes Buchanan, Dickenson, Lee, Russell, and Wise Counties and Norton City. RSA 8 includes Amelia, Brunswick, Lunenburg, Mecklenburg and Nottoway Counties.

Wyoming: Greater Casper area and RSA 1 includes Big Horn, Hot Springs, Park and Washakie Counties. RSA 2 includes Campbell, Crook, Johnson, Sheridan and Weston Counties. RSA 4 includes Albany, Goshen, Laramie, Niobrara and Platte Counties. RSA 5 includes Converse County.