New Jersey’s Board of Public Utilities received more than 460 identical e-mails urging the regulator to approve Verizon’s proposed settlement permitting it to renege on broadband expansion commitments that would have brought high-speed Internet to every citizen in the state that wanted it.

More than a few of those e-mails were submitted with fake e-mail addresses or without the knowledge of the alleged senders. An Ars Technica piece this week confirmed Stop the Cap!’s own findings of the astroturf effort and found more customers denying they ever submitted comments to the BPU about the settlement.

“I am a customer only to Verizon and I was not contacted by them to submit anything,” one person told Ars. “If they did, I would’ve slammed them. They are gougers. If AT&T was where I lived, I would switch in a heart beat.”

When this customer was shown the e-mail he allegedly sent to state officials, he said, “That would mean someone did it on my behalf. I can assure you that I did not send that response.”

In other cases, Ars discovered some of Verizon’s vendors were misrepresenting the nature of the settlement and asking people they worked with or knew to sign the petition as part of a contest.

“I hope you are doing well. I have a favor to ask,” one e-mail read. “I’m working on a project for our client, Verizon, and they need some signatures to an online petition. Verizon wants to expand its offerings in New Jersey, but needs approval from the state. Higher-speed Internet, more FiOS, etc.”

“All you need to do is enter your e-mail and zip code,” the message continued. “I appreciate it. We’re in a contest with another vendor to see how many people we can get to sign it. Just let me know yea or nay, so I can get the credit for it.”

Of course signing the petition would result in the exact opposite of more FiOS deployment and higher speed Internet access.

That online petition turned out to be hosted on the website of the astroturf group 60+ Association, which is funded by various corporations and works with D.C. lobbying firms who help corporate clients launch “social media” campaigns that appear to be spontaneous grassroots movements. The group only supports Republican candidates for office and is normally preoccupied with attacking health care reform with the major financial contributions it receives from the pharmaceutical industry. With Obamacare more or less settled, the group now also advocates for telecom companies without bothering to disclose any financial arrangement.

One of the lobbying firms associated with 60+ Association — Bonner & Associates, was implicated in a 2009 scandal when they were caught sending forged letters to members of Congress claiming to be from local minority and senior citizen groups. The lobbying firm quietly changed its name to Advocacy to Win (A2W), where it is still accepting clients that want to launch astroturfing campaigns.

One banking trade association gave glowing reviews for their work:

Verizon has been upset with the tone and accuracy of many New Jersey residents who have written the state’s Board of Public Utilities urging them to reject a settlement offer than would allow Verizon to walk away from its commitment to deliver high-speed broadband to 100% of the state.

While calling many of its opponents misinformed about the company’s original commitments, a Verizon spokesperson targeted a particularly nasty response to one of its strongest critics — Teletruth’s Bruce Kushnick, who has accused Verizon of breaking its promises in New Jersey and substituting outdated DSL and expensive, usage-capped 4G wireless broadband as a broadband equivalent.

Northwest, central and southern New Jersey all lack solid broadband coverage. (Map: Connecting NJ)

Kushnick has argued that Verizon has cooked the books, diverting funds that should have been spent on FiOS expansion into its more profitable wireless subsidiary Verizon Wireless instead. He wants New Jersey to conduct a thorough investigation of Verizon’s financial reporting and learn why the company has reneged on a broadband commitment that originally promised a minimum of 45/45Mbps high-speed broadband for 100% of the state by 2010 in return for rate deregulation and tax breaks. Verizon got the deregulation and tax breaks but much of the state is still waiting for the faster broadband it was promised.

Now Verizon wants the state to approve a settlement that will redefine its commitment from 45/45Mbps to 4Mbps DSL or wireless 4G broadband.

Verizon spokesman Lee Gierczynski said criticisms about the company’s performance in New Jersey are “way off base.” He said there never was any commitment to deploy FiOS across all of New Jersey because FiOS did not exist at the time of the original agreement.

“Nobody knew what FiOS was 20 years ago,” Gierczynski said. “It wasn’t until 2004 when FiOS came on the scene.”

What about the 45/45Mbps speed commitment?

“[The agreement] didn’t say a minimum of 45Mbps,” Gierczynski said, “it just says ‘up to’.”

Gierczynski particularly bristled over Kushnick’s ongoing criticisms of Verizon.

“For nearly two decades, he has made the same, tired baseless allegations over and over again about Verizon and its predecessor companies — not only in New Jersey but in other states as well,” Gierczynski told The Record in an email. “His specious arguments are devoid of fact, relying on misinformation and myths to prop up his claims. This filing is no different.”

With more than 1,000 comments on file with the BPU, Verizon invited the regulator to dismiss critics that demanded Verizon live up to its original commitments:

“The vast majority of comments opposing the Stipulation that have been posted by the Board to date were submitted via a standard form letter generated by the New Jersey State AFLCIO with the subject line “Tell Verizon to Live Up to the Opportunity New Jersey Agreement.”

“Other comments opposing the Stipulation offer inaccurate claims about what was contemplated by Opportunity New Jersey or what is in the Stipulation.”

“AFL-CIO Letters:  These letters opposing the Stipulation appear less convincing when the locations of senders are examined— More than 25 are from people located outside of New Jersey and some appear to be from municipalities not in Verizon’s service territory. “

Verizon did not bother to mention the circulation of a pro-Verizon form letter that was submitted by hundreds of people, many Verizon employees and retirees, as reported last week by Stop the Cap!

Two of those letters were signed by Paul A. Sullivan, Verizon’s regional president of consumer and mass business markets in New Jersey and Tracy Reed, a Verizon manager… in Atlanta. Neither identified themselves as Verizon management.

Further concerns were raised by Kushnick when he found that the people and businesses Verizon touts as supporting Verizon’s position all have some relationship with Verizon:

• New Jersey Technology Council — Board member,  Douglas Schoenberger, VP, Public Policy, Verizon NJ, Inc
• The Meadowlands Chamber of Commerce — Donnett Barnett Verley, Director of Public Policy and Corporate Responsibility, for Verizon New Jersey.  “I am responsible for Verizon’s philanthropic and community outreach efforts throughout the state. I serve as an active board member of …the Meadowlands Chamber of Commerce.”
• Greater Paterson Chamber of Commerce — “Hi. I’m Rick Ricca, Director – External Affairs. I am responsible for the company’s relationship and interaction with municipal and county governments… I also serve on… Greater Paterson Chamber of Commerce.”
• The Commerce and Industry Association of New Jersey (“CIANJ”), Member of the Board, Sam Delgado V.P. Community & Stakeholder Affairs Verizon
• Greater Elizabeth Chamber of Commerce — “Verizon, a telecommunication company received the Member-to-Member Award for its important contribution to Elizabeth’s business.”
•  Cooper’s Ferry Partnership —Verizon is on the Board of Directors. “The organization’s operational budget is currently divided into three main categories: board membership… investments from these valued partners that has allowed CFP to grow its mission and expand throughout the city of Camden.”
• Puerto Rican Association for Human Development —“Verizon Presents $20,000 to PRAHD”
• Latino Institute  — Our Partners and Funders, Verizon
• Gudino, David Joseph — Associate General Counsel, Verizon Wireless
• NJ SHARES —“Verizon New Jersey partners with NJ SHARES for Communications Lifeline outreach and enrollment efforts.”

“In fact, it’s hard to identify any legitimate group that supports the Verizon stipulation and is not funded by Verizon,” said Kushnick.

Verizon’s FiOS expansion is still dead.

New Jersey’s Board of Public Utilities has heard from hundreds of New Jersey residents about a settlement proposal that would let Verizon off the hook for failing to keep a commitment to provide high-speed broadband service statewide no later than 2010.

Curiously, hundreds of those comments were identical e-mails originating from AOL, Hotmail, MSN and Yahoo mail accounts urging the state to show lenience to Verizon — to forgive and forget the company’s broken promises. No mailing addresses were included. But the attached names and e-mail addresses were enough for Stop the Cap! to discover many of those submitting comments used non-working e-mail addresses or claimed their names were submitted without their knowledge or permission. Many others were actually employed by Verizon or were retirees.

“The proposed stipulation is fair and balanced and under your guidance, will build on the success that the Board and Verizon have achieved in making the Garden State one of the most wired broadband states in the country,” writes David Gudino, who doesn’t disclose in his correspondence with the BPU that his name is included in a list of attorneys working for Verizon Wireless.

“I would like to declare my support for the proposed stipulation between your Board Staff and Verizon as it relates to Opportunity New Jersey,” says another on behalf of an organization getting contributions from Verizon. “The stipulation will help ensure continued deployment of advanced communications services. Access to these services will not only benefit New Jersey’s businesses and nonprofits, but consumers of all ages as well.”

By “advanced communications services,” the letter’s signers should know very well that means more 4G LTE wireless broadband with stingy usage caps and high prices, not more FiOS fiber to the home service.

What proved especially surprising was finding so many customers claiming to be happy with Verizon’s broadband performance in New Jersey who are still relying on AOL dial-up accounts. Stop the Cap! contacted a random 150 signers of the identical letters by using their attached e-mail addresses, which are part of the public record. We asked the writers to expand on their views about Verizon’s performance in New Jersey, whether they were satisfied with their current Internet provider, whether they have broadband service, and where they learned about this issue.

Remarkably, 35 of the e-mail addresses turned out to be invalid, so we contacted an extra 35 and 12 of those e-mail addresses were invalid as well. We found this unsettling because the only identifying information attached to the pro-Verizon correspondence was a name and e-mail address. We couldn’t be sure the authors were New Jersey residents much less real people.

We received 18 replies. Several were Verizon retirees asked to sign letters of support for Verizon. Another five had no idea what we were talking about and denied they submitted any views, pro or con, about Verizon. Three of those were Comcast customers that said goodbye to Verizon more than a decade earlier. Many others were associated with groups that happen to receive financial support from Verizon. Several  had no broadband access and were using dial-up.

Stop the Cap! did not receive a single reply from any person ready to articulate informed views about the terms of the settlement offer. They were simply asked to lend their names and e-mail addresses to Verizon’s campaign and had never seen the settlement proposal or heard much about it.

Judith Stoma’s family has worked for Verizon/NJ Bell since 1958. She’s 71 years old today and she supports Verizon, at least in its efforts to “lead the way with N.J. at the forefront of technology.” Abdicating on FiOS expansion in favor of the same old DSL service Verizon proposes in its settlement seems to run contrary to that goal.

In several other instances, some of Verizon’s “supporters” actually used a space provided in the form letter to vent their frustration with Verizon!

Michael DeNude was irritated he never got FiOS: “We live in Riverdale and have not benefited by any upgrade.”

Paula Thomas was annoyed that Verizon outsources its workforce: “Verizon already outsources their telephone [operator] service. They should also guarantee that U.S. Citizens are given preference in the ‘job growth’ they ensure will happen.”

William Barlen thinks it’s a shame the current state of broadband in the U.S. is lacking: “It is sad that we have dropped behind over 50 countries on broadband speed and deployment. If you do not support this work exactly what are you doing?”

Paul Minenna is concerned that without FiOS broadband, speedier Internet access is not forthcoming: “Please make sure that you keep NJ moving forward with top-notch technology access. This is not the time to slow down Internet access.”

John Zilg’s letter is the same as nearly every other in support of Verizon, until he was given the opportunity to include his own remarks, which are completely contrary to everything else in the letter: “It is critical to continue supporting what has already been put into place. I urge you to not change direction.”

It is easily apparent that among the letters in support of Verizon, more than a few were not at all informed about what they were signing, and in many cases actually held completely different views when someone took the time to inquire in more detail. We are also very concerned about the number of invalid e-mail addresses attached to letters that carried no mailing address. On an issue of this importance, it is disturbing to not be certain those communications represent the legitimate views of actual New Jersey residents.

These factors must be taken into consideration as the Board of Public Utilities ponders the public input.

Phillip “Spending $6k per cable customer is obviously a much better deal than paying half that to build a fiber to the home network” Dampier

Math was never my strong subject, but even I can calculate the groupthink of American cable and telephone companies and their friends on Wall Street just doesn’t add up.

This week, we learned that cable companies like Bright House Networks, Suddenlink, and Charter Communications are already lining up for a chance to acquire three million cable customers Comcast intends to sell if it wins approval of its merger with Time Warner Cable. Wall Street has already predicted Comcast will fetch as much as $18 billion for those customers and pegged the value of each at approximately $6,000.

But for less than half that price any company could build a brand new fiber to the home system capable of delivering 1,000Mbps broadband and state-of-the-art phone and television service and start banking profits long before paying off the debt from buying an inferior coaxial cable system. Yet we are told time and time again that the economics of fiber to the home service simply don’t make any sense and deploying the technology is a waste of money.

Let’s review:

Google Fiber was called a boondoggle by many of its competitors. The folks at Bernstein Research, routinely friendly to the cable business model, seemed appalled at the economics of Google’s fiber project in Kansas City. Bernstein’s Carlos Kirjner and Ram Parameswaran said Google would throw $84 million into the first phase of its fiber network, connecting 149,000 homes at a cost between $500-674 per home. The Wall Street analyst firm warned investors of the costs Google would incur reaching 20 million customers nationwide — $11 billion.

“We remain skeptical that Google will find a scalable and economically feasible model to extend its build out to a large portion of the U.S., as costs would be substantial, regulatory and competitive barriers material, and in the end the effort would have limited impact on the global trajectory of the business,” Bernstein wrote to its investor clients.

So Google spending $11 billion to reach 20 million new homes is business malpractice while spending $18 billion for three million Time Warner Cable customers is confirmation of the cable industry’s robust health and valuation?

Bernstein’s firm never thought highly of Verizon FiOS either.

“If I were an auto dealer and I wanted to give people a Maserati for the price of a Volkswagen, I’d have some seriously happy customers,” Craig Moffett from Bernstein said back in 2008. “My problem would be whether I could earn a decent return doing it.”

Back then, Moffett estimated the average cost to Verizon per FiOS home passed was $3,897, a figure based on wiring up every neighborhood, but not getting every homeowner to buy the service. Costs for fiber have dropped dramatically since 2008. Dave Burstein from DSL Prime reported by the summer of 2012 Verizon told shareholders costs fell below $700/home passed and headed to $600. The total cost of running fiber, installing it in a customer’s home and providing equipment meant Verizon had to spend about $1,500 per customer when all was said and done.

Moffett concluded Verizon was throwing money away spending that much on improving service. He wasn’t impressed by AT&T U-verse either, which only ran fiber into the neighborhood, not to each home. Moffett predicted AT&T was spending $2,200 per home on U-verse back in 2008, although those costs have dropped dramatically as well.

Moffett

Moffett’s solution for both Verizon and AT&T? Do nothing to upgrade, because the price wasn’t worth the amount of revenue returns either company could expect in the short-term.

It was a much different story if Comcast wanted to spend $45 billion to acquire Time Warner Cable however, a deal Moffett called “transformational.”

“What we’re talking about is an industry that is becoming more capital intensive,” Todd Mitchell, an analyst at Brean Capital LLC in New York told Bloomberg News. “What happens to mature, capital-intensive companies — they consolidate. So, yes, I think the cable industry is ripe for consolidation.”

Other investors agreed.

“This is definitely a bet on a positive future for high-speed access, cable and other services in an economic recovery,” said Bill Smead, chief investment officer at Smead Capital Management, whose fund owns Comcast shares.

But Forbes’ Peter Cohan called Google’s much less investment into fiber broadband a colossal waste of money.

“Larry Page should nip this bad idea in the bud,” Cohan wrote.

Cohan warned investors should throw water on the enthusiasm for fiber before serious money got spent.

“FTTH authority, Neal Lachman, wrote in SeekingAlpha, that it would cost as much as $500 billion and could take a decade to connect all the houses and commercial buildings in the U.S. to fiber,” Cohan added.

Cohan was concerned Google’s initial investment would take much too long to be recovered, which apparently is not an issue for buyers willing to spend $18 billion for three million disaffected Time Warner Cable customers desperately seeking alternatives.

An investment for the future, not short term profits.

Municipal broadband providers have often chosen to deploy fiber to the home service because the technology offers plenty of capacity, ongoing maintenance costs are low and the networks can be upgraded at little cost indefinitely. But such broadband efforts, especially when they are owned by local government, represent a threat for cable and phone companies relying on a business model that sells less for more.

The American Legislative Exchange Council (ALEC), funded by Comcast, Time Warner, AT&T, Verizon, and other large telecom companies is at the forefront of helping friendly state legislators ban community fiber networks. Their excuse is that the fiber networks cost too much and, inexplicably, can reduce competition.

“A growing number of municipalities are […] building their own networks and offering broadband services to their citizens,” ALEC writes on its website. “ALEC disagrees with their answer due to the negative impacts it has on free markets and limited government.  In addition, such projects could erode consumer choice by making markets less attractive to competition because of the government’s expanded role as a service provider.”

The Fiber-to-the-Home Council obviously disagrees.

“Believe it or not, there are already more than a thousand telecom network operators and service providers across North America that have upgraded to fiber to the home,” says the Council. “The vast majority of these are local incumbent telephone companies that are looking to transform themselves from voice and DSL providers into 21st century broadband companies that can deliver ultra high-speed Internet and robust video services, as well as be able to deliver other high-bandwidth digital applications and services to homes and businesses in the years ahead.”

Stephenson

In fact, a good many of those efforts are undertaken by member-owned co-ops and municipally owned providers that answer to local residents, not to shareholders looking for quick returns.

The only time large companies like AT&T move towards fiber to the home service is when a competitor threatens to do it themselves. That is precisely what happened in Austin. The day Google announced it was launching fiber service in Austin, AT&T suddenly announced its intention to do the same.

“In Austin we’re deploying fiber very aggressively,” said AT&T CEO Randall Stephenson. “The cost dynamics of deploying fiber have dramatically changed. The interfaces at the homes, the wiring requirements, how you get a wiring drop to a pole, and the way you splice it has totally changed the cost dynamics of deploying fiber.”

Prior to that announcement, AT&T justified its decision not to deploy fiber all the way to the home by saying it was unnecessary and too costly. With Google headed to town, that talking point is no longer operative.

KJWY-TV was a station in Jackson, Wyo. But now it serves Philadelphia, Pa.

Two small television stations in Wyoming and Nevada with audiences in the thousands have packed up and are moving to bigger cities after exploiting a loophole in FCC rules.

KJWY, Channel 2 in Jackson, Wyo. used to relay television programs from a Casper station for the benefit of the 9,500 people living in the Teton County community. The station operated with just 178 watts — the lowest powered digital VHF station in the country. KVNV, Channel 3 in Ely, Nev., originally relayed Las Vegas’ NBC affiliate for the benefit of 4,200 locals. Both stations were purchased at a very low-cost by a mysterious partnership of buyers back east.

Today, KJWY has a new call sign – KJWP. It’s still on Channel 2, but the station is now licensed to operate from Wilmington, Del, with its transmitter located just across the border in Philadelphia. It’s one of the rare few television stations in the eastern half of the country that have “K” call letters usually assigned to stations west of the Mississippi River. KVNV is expected to follow to its new home in Middletown Township, Monmouth County, N.J., later this year. Its transmitter will have nothing but open water between northern New Jersey and nearby New York City — its intended target.

The two stations’ original combined audiences likely never exceeded 10,000, because both stations had very limited range for their transmitters which served two very small communities. But in the big cities of New York and Philadelphia, the stations can now reach a potential audience north of ten million and collect advertising revenue the stations in Wyoming and Nevada could only dream about.

PMCM, LLC., obviously had this in mind when it acquired the two stations in 2009. The principals behind PMCM already own six Jersey Shore radio stations in Monmouth and Ocean County under the name Press Communications, LLC.

How Congress and the FCC Opened the Door

PMCM discovered a little-known law that was originally introduced to help spur the launch of VHF television stations serving small Mid-Atlantic states shadowed by nearby large cities. In 1982, New Jersey Sen. Bill Bradley attached an amendment to an unrelated tax bill that required the FCC to automatically renew the license of any commercial VHF station that agrees to move to a state without one. The new law superseded nearly all the FCC’s other licensing regulations. At the time the law was passed, the only two states that were without any commercial VHF stations were Delaware and New Jersey.

That summer, RKO General, embroiled in a major scandal over illegal billing irregularities and deceiving regulators, thought it could save its New York station – WOR-TV – from threatened license revocation by agreeing to move from New York City to Secaucus, N.J. In agreeing to move the station, WOR would also expand much-needed coverage of New Jersey news and current affairs. But viewers barely noticed and by 1987 RKO General’s bad behavior got them booted out of the broadcasting business altogether after what FCC administrative law judge Edward Kuhlmann called a pattern of the worst case of dishonesty in FCC history. WOR’s new owners changed the call sign to WWOR-TV and the station’s home remains in Secaucus.

Two things happened after the mess with WOR. Bradley’s law remained on the books and America’s adoption of digital over the air television for full power stations meant channel number changes for many stations by the time the transition was complete in 2009. WWOR-TV relocated to UHF channel 38 (while still promoting itself as Channel 9) and Delaware’s only remaining VHF station is non-commercial WHYY Channel 12, a PBS station better known as hailing from Philadelphia. Once again, New Jersey and Delaware were without commercial VHF stations, a fact that did not escape the notice of PMCM.

Me-TV Launches in Philadelphia and New York

After a lengthy court battle with the FCC, PMCM successfully moved and relaunched KJWP, Channel 2, on March 1 as Philadelphia’s Me-TV affiliate. Although the transmitter power was raised, the station’s digital VHF signal still doesn’t reach very far, so its owners invoked “must-carry” with area cable systems, which means cable systems must carry the channel so long as the station does not ask for any payment.

The station’s reach is defined by the FCC far beyond its actual broadcast signal. Officially, the station can demand cable carriage as far south as Dover, Del., as far west as Lancaster, Pa., almost all of southern New Jersey and into northern New Jersey. Today, Comcast and other cable systems carry KJWP across Philadelphia and the Delaware Valley. Verizon FiOS is adding the station by this weekend and it is also available via satellite TV local station packages. Unlike larger stations fighting to be paid by cable systems, KJWP is happy to be carried by all without charge because it can sell advertising to a much larger potential audience. It plans to produce local programming, including news, which opens up even more advertising opportunities.

KVNV remains on the air in Ely for now as a My Family TV affiliate, showing a mix of family friendly and religious programs. But its days as a Nevada broadcast station are numbered. KVNV will officially sign-off in Ely for good in a few months and relaunch operations across the New York City market as New York’s official Me-TV affiliate. Like with KJWP, KVNV will keep its original call letters and invoke must-carry, which means the station is likely to appear on northern New Jersey Comcast systems, Time Warner Cable in Manhattan and other boroughs, as well as Cablevision on Long Island and across parts of Brooklyn.