Comcast apparently doesn’t like Verizon invading its home turf.  The Philadelphia-based cable company and the New York-based telephone company are engaged in an all-out ad war in southeastern Pennsylvania, and Verizon is calling “foul.”

Comcast replies turnabout is fair play, telling the Philadelphia Business Journal:

“Verizon’s been running a negative campaign against Comcast for years and its response to our campaign shows that they can dish it out but they can’t take it. As might be expected, the better the advertising and the more traction that it gains with consumers, the louder the competitor will object,” said Jennifer Khoury, Comcast spokeswoman.

So what ad put Verizon over the edge? Apparently it wasn’t the Verizon sales-stalker who invades people’s cars, front lawns, and demands credit card numbers of women at their doorstep.  No, it was the fact that Comcast depicted a typical Verizon FiOS installation as resembling a chaotic home lawn invasion, complete with heavy ‘yard wrecking’ equipment, life-threatening recklessness, and a monthly bill so prolific in pages, it requires a forklift to deliver.

That did it.

“These ads have people ripping up property, putting lives in danger and suggesting that this is typical of FiOS installations,” Eric Rabe, Verizon’s senior vice president for media relations, said. “That is an outrageous characterization and it has to stop.”

Rabe wasn’t sure if Verizon would sue if Comcast doesn’t knock it off.  The two companies are “having conversations,” according to Rabe.

While they talk, let’s explore the offending ad, plus several others from both sides.  It must be nice to live in a heavily competitive market.  Too many of us do not.  Comcast limits monthly usage to 250GB.  Verizon FiOS has no limit.

[flv width=”640″ height=”360″]http://www.phillipdampier.com/video/Comcast FiOS Bashing Ad 1.flv[/flv]

More video follows below…

… Continue Reading

Politico published an article this week attempting to navigate the waters of the nation’s telecommunications regulatory policies, as seen in the eyes of the Federal Communications Commission.  As Stop the Cap! readers already know, Net Neutrality has a tendency to be defined in many different ways.  It’s the color-changing Magic Sprinkles of regulatory policy.  Everyone has a favorite color.

We define Net Neutrality as giving equal access and treatment to all data on broadband networks without favor or foe.  Usage caps indirectly impact on Net Neutrality because they can artificially limit consumption with the potential of exempting “preferred partner” content. Another example: “digital phone” products from the bandwidth provider that are excused from consumption meters violate Net Neutrality principles when the competition doesn’t get the free pass your own product does.

Obama’s appointments to the FCC claim to support Net Neutrality principles and state they will keep those in mind as they regulate telecommunications for at least the next four years.

“In the beginning of the storm, we were in this frenzy because of statements being made by the CEOs about charging websites and application providers for different levels of access to reach Internet users. That got policymakers engaged, and the president made it his No. 1 tech agenda item,” he said. “Now we have a brand-new government. The community is looking to see what is going to happen. If things don’t happen in a timely way, you will see the back end of that storm.”

Tom Tauke

Tom Tauke, executive vice president of public affairs, policy and communications at Verizon tried to put banana colored sprinkles on a watermelon flavored ice cream cone when he attempted to conflate the concept of Net Neutrality with wireless phone companies handing out free phones to victims of stalkers and domestic violence.  Huh?  Under Net Neutrality, the stalkers should also get phones?

Tauke also demonstrated either a fundamental misunderstanding of the concept, or deliberately tried to muddy the waters of Net Neutrality. Verizon has traditionally despised and has lobbied against Net Neutrality for years.

In Tauke’s eyes, Net Neutrality protections may somehow impact parents’ abilities to monitor and control their children’s access to the Internet, interfere with identify theft control measures, and force an end to protecting your wireless cell phone call from deterioration because too many kids at the mall are texting on the same network.

Bizarroworld definitions like that cheapen the reality that enforced Net Neutrality will go a long way to protect consumers from predatory practices of a different kind — greedy providers looking for another payday by demanding compensation to move your web page, video, or download along at a “reasonable” speed.  Those unfortunate enough to not pay may find the very definition of “broadband” redefined as well… “Internet access mildly faster than dial-up most of the time, except on weekends when ‘freeloaders’ have to wait until after 11pm.  Material owned, controlled or partnered with us are always exempt, of course.”

Meanwhile, the rest of Verizon thinks American broadband is highly competitive, fast, and that companies are implementing new pricing and service “options” to bring “greater value” (ie. mandated usage caps) to their customers. A preview of the remarks Verizon will make at today’s Free State Foundation panel on broadband was highlighted on Verizon’s Policy Blog:

Link Hoewing, V.P. for Internet and technology policy for Verizon, previews his discussion about the health of the U.S. broadband marketplace. The Capitol Hill panel he references is hosted by the Free State Foundation and will take place 6/5/09.

'If you give us exactly what we want, we might wire your town with fiber optics. If not, there is always Wisconsin.'

The Trojan Horse of the 2000’s apparently comes in the form of spools of fiber optic cable.  Verizon assumes the attractive notion of FiOS, fiber to the home for broadband, telephone, and video programming, is worth sacrificing local oversight.  The company has made it known it does not enjoy what they consider a cumbersome franchising application procedure in Massachusetts.  In a public relations push, Verizon has suggested that giving them quicker approval will guarantee state residents the golden promise of fiber optics.  If the company doesn’t get what it wants, maybe Wisconsin or another state where Verizon is deploying FiOS will:

Ellen M. Cummings, a spokeswoman for Verizon, said that with the struggling economy, the company has to choose where to commit its financial resources. Therefore, it is looking for the quickest return on its investment.

“Here in Massachusetts, it puts us in a predicament. If the company is trying to decide how to deploy money, and Massachusetts is vying against other states, like Wisconsin, where the wait is as little as five days, it definitely puts Massachusetts at a disadvantage,” she said.

Every wired provider is subject to local community licensing, in the form of a franchise, which permits companies to string wires through towns and cities, on poles as well as underground, in return for oversight and a small piece of the action.  Local governments justify franchising to regulate companies tearing up local streets and neighborhoods to maintain their networks, as well as making sure that all citizens within a community are served equitably and that the community benefits from the service.

The cable industry has lived under the franchise system since its inception.

Verizon decided it can’t be bothered dealing with individual municipalities in Massachusetts, and last year tried,  but failed, to replace the local franchising system with a single statewide franchise.  This year they’ve returned with a Verizon-friendly bill that would dramatically tip the scales in their favor, limiting local oversight and reducing their public service commitments.

The companion bills, (S. 1531) by Sen. Steven Panagiotakos of Lowell in the Senate, and House bill (H. 3765) by Rep. Michael Rodrigues of Westport, would mandate that each municipality limit consideration of Verizon’s franchise applications to no more than 90 days, and opens up a number of loopholes that Verizon could use to do an end run around a community and run the clock out, assuring quick approval without making concessions.

At worst, a provision in the bill setting a strict 90 day window for consideration of a franchise application, even if incomplete, ties the hands of municipalities.  Language that restricts the right of municipalities to deny applications gives the upper hand to Verizon, and the back of the hand to consumers.

One of the most common promises local communities extract from any wired provider is a guarantee they will establish wiring policies to equitably reach people throughout the franchise area, not simply the wealthiest neighborhoods, or easiest to wire.  While it has never been practical to insist on 100% wiring coverage, particularly in more isolated, rural communities, most franchise agreements insist on a uniform policy that says if there are a certain number of homes within an area, it must be wired.  Without that assurance, prior experience has shown operators would often “redline” communities, wiring prosperous streets while ignoring others.  Municipalities in Massachusetts want to guarantee that Verizon doesn’t engage in that kind of behavior, particularly after witnessing the company jettisoning “undesirable” customers in three nearby states — Vermont, New Hampshire, and Maine, which were sold off to FairPoint Communications.  No FiOS for them.

In general, more competition is good news, especially when Verizon comes to town with FiOS, which is sure to give the incumbent cable operator a real headache.  But Verizon’s complaints ring a little hollow when considering the company has managed to already obtain franchises in 93 communities across the state, and is literally obtaining new agreements faster than wiring crews can get into communities and start the upgrades.  While there may be a few towns that drag their feet for a variety of reasons, customer demand for FiOS is sure to light fires under elected officials to get a move on.  Doing it fast is not necessarily the same as doing it right.  As our readers are coming to learn, promises made by telecom providers that at first glance sound consumer-friendly turn out to be anything but.

One more reason to believe that:  the state’s incumbent cable operators are also opposing the bills, claiming they extend special benefits to Verizon that they, themselves, have never received. Cable companies on the same side as municipalities on questions of competition?  Of course most of the state’s cable operators are already past the franchising process, and merely return every decade or so for perfunctory rubber-stamp renewals, so green-lighting Verizon’s proposed bills would only expose them to FiOS competition sooner.

Paul R. Cianelli, the president of the New England Cable and Telecommunications Association, which represents the cable companies Comcast, Charter Communications, Time Warner and Cox, but not Verizon, said, “We oppose this legislation.”

“It’s another attempt by Verizon to get a special deal. They are pushing for legislation that would give them an advantage over existing cable providers. And they are attempting to chip away at the authority and powers of the municipalities to grant franchises,” he said.

In the end, we believe Ellen Cummings at Verizon who said it best: “[Verizon] is looking for the quickest return on its investment.”  Unfortunately, that’s not always compatible with the best interests of consumers.

Verizon’s decision to exit several smaller communities across the country and hand operations over to Frontier isn’t threatening Comcast, one of the predominate cable providers in some of the larger communities Verizon is abandoning in Washington, Oregon, and Indiana.  Some of the impacted communities, particularly Fort Wayne, were being prepared for Verizon FiOS before this week’s announcement.  While Verizon and Frontier have agreed to continue building out the fiber to the home projects already underway, the cable operators serving these communities are likely to exploit the molasses slow transfer from one phone company to the other.

Comcast is busily deploying DOCSIS 3 in their service areas, and even with Verizon FiOS, cable operators with upgraded networks can readily compete for broadband business in any of their markets.

As Verizon rapidly loses interest in the markets it will be leaving, the slow transition can be part of a publicity campaign by the cable operator to convince customers to abandon the phone company, because ‘they’ve abandoned you.”

Donna Jaegers, a senior research analyst at D.A. Davidson & Company told Multichannel News, “Verizon has no real incentive to continue to invest more capital in these markets.”

“In that one-year window, the cable competitors have an easy sales pitch,” she said. “They can say, ‘Hey look, Verizon is already neglecting you — and for the next year they’ll have even more reason to neglect you.’ ”

Cable operators completing upgrades to their networks as a normal cost of doing business make competing with changes in a market a snap.  Some companies recognize the benefits of DOCSIS 3 and have upgraded without running a “pledge drive” to beg for money to do it.  Others have not.

The Communications Workers of America and the International Brotherhood of Electrical Workers, two unions representing employees at Verizon and Frontier, are skeptical about the benefits of Frontier acquiring telephone lines from Verizon.

In a joint statement, the two unions suggest the debt load from the deal will mean less money for broadband service deployment, not more.

The sale would move 4.8 million lines serving residential and business customers in 14 states to Frontier. The deal calls for Frontier to take on $3.3 billion in debt; Verizon gets that amount in debt relief. That leaves Frontier saddled with debt that will lessen the potential amount available for investment in high speed broadband deployment.

Similar tax-free transactions by Verizon, especially those involving the Reverse Morris Trust tax provisions, haven’t worked out so well, especially for consumers in New England now served by FairPoint Communications.