We have the complete video of last week’s Revenue Laws Study Committee meeting which featured the introduction of a draft bill that would dramatically restrict any entrant into North Carolina’s broadband marketplace unless they were a private industry provider.  The de-facto municipal broadband ban legislation comes courtesy of retiring Senator David ‘Fiber is Obsolete’ Hoyle (D-Gaston), who sprung the proposed bill minutes before debate was to begin.  Despite the fact opponents (and consumers) were left unprepared to push back against Hoyle’s anti-consumer legislation, a few legislators and citizens rallied to the cause.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/NC Rev Laws Study Comm 5.5.10-1.mp4[/flv]

North Carolina Revenue Laws Study Committee Meeting (May 5, 2010 — 47 minutes)

A Viewer’s Guide

Senator Daniel G. Clodfelter (D-Mecklenburg) wants both sides to “turn the volume down,” apparently not appreciating the fact a retiring senator pushing through an anti-consumer telecommunications company dream-come-true draft bill would likely provoke a consumer backlash.

Rep. Weiss was the loudest opponent of the proposed legislation to stop municipal broadband

Clodfelter is surprised the debate has become so polarized.  It shouldn’t be, considering this debate is hardly a new one.  Consumer advocates have seen providers use the same road map to enact anti-consumer municipal broadband prohibitions in more than a dozen states.  The same talking points and arguments appear every time this issue comes up.  Consumers are fed up with the corporate protectionism these bills represent, and they become extremely angry when those elected to represent them instead represent the interests of big corporate telecom companies.

Clodfelter’s ultimate vote spoke louder than his pleas for civility — he voted for the draft that guarantees North Carolina consumers will continue to pay high prices for telecommunications services.

Senator David Hoyle’s eyes rarely left his carefully prepared talking points.  Perhaps that’s because he’s not as familiar with the issues as he claims to be.  When a legislator is forced to keep his eyes on his remarks, seeming to stumble through several important points, it suggests unfamiliarity with the issues.  That’s hardly a surprise when legislation is introduced by a telecom-friendly legislator who knows only as much as the accompanying information packet of talking points allows.

We saw that first hand last year with Ty Harrell, who introduced legislation that he so fundamentally didn’t understand, he was later forced to repudiate his own bill.  Watch Hoyle and ask yourself — is this a legislator who understands municipal broadband, or is this a senator carrying water for big telecom?

Hoyle’s testimony contained many interesting comments we’d like to rebut:

“The level playing field aspect is gone.”  He’s got that right.  His proposed draft bill mires municipal providers with terms and conditions no private provider ever endured.  Where is your referendum about whether or not you wanted to pay Time Warner Cable for dozens of channels you never asked for, and don’t want?  Where is your referendum about whether or not you want the incumbent cable and phone companies to continue providing service in your town?  Does the phone company need to hold a referendum to replace phone wiring on the poles?  No?  Then why does Hoyle’s bill demand referendums for municipal system repairs and upgrades?

Rep. Luebke characterized Hoyle's proposal as premature and urged his colleagues to support further study on this issue

Hoyle misrepresented the financing of municipal broadband projects, most of which are not financed at the expense of every local taxpayer.  His carefully crafted suggestion that citizens should vote for such projects is a nice concept, but remember incumbent providers can use unlimited amounts of money they’ve earned from overcharging you for years to bombard residents with misinformation.  Meanwhile, your local government cannot spend a penny to rebut them.  Is that a fair vote or one engineered to provide victory to incumbent providers?

Senator Hoyle suggested unnamed interests have said he has a vendetta against cities — that he doesn’t like cities.  That’s an example of a politician constructing a false straw-man argument to shoot down.  Of course his real “vendetta” is against North Carolina consumers.  With Hoyle not seeking re-election, he doesn’t have to answer to them.

Hoyle brought up the sale of bankrupt Adelphia Cable’s systems to the local governments of Mooresville and Davidson, and then demagogued it with cherry-picked talking points, conflating an old, outdated cable system with construction of state-of-the-art fiber systems as proposed in communities like Salisbury.

Adelphia Cable’s founders and chief corporate executives are sitting in a federal penitentiary.  A court found both John and Timothy Rigas guilty of more than a dozen counts of fraud and conspiracy in 2004, a decision largely upheld in 2008, and both continue to serve 12 and 17 year sentences respectively.

Every Adelphia Cable system put up for sale by the Bankruptcy Court was littered with problems.  In San Diego, inspectors found more than 3,000 improperly grounded cable connections in customer homes.  Company records were in chaos as well, and the result was major headaches for buyer Time Warner Cable.

The North Carolina Adelphia systems were not much different.  The communities had been victimized twice by providers who delivered broken promises, fewer channels at higher prices, and bad service.  When Time Warner Cable proposed to take control of the systems and wouldn’t meet the communities needs, Mooresville and Davidson decided to exercise right of first refusal and purchase the systems themselves.

What they found after closing the deal were the same kinds of problem Time Warner Cable and Comcast were dealing with in other former Adelphia communities.  The difference is the cable companies just raised customers’ rates to defray the costs of cleaning them up.  They also left many towns with cable systems built based on economy more than customer needs.  With limited competition, where could dissatisfied subscribers go?

Mooresville and Davidson both faced:

A significant number of subscribers who stopped paying for service from Adelphia much earlier and faced no consequences or service suspension.  When MI-Connection, the municipal provider, began billing for services rendered, they canceled.  Of course, the sellers never disclosed the fact there were many non-paying customers getting service for free.  When the towns purchased the systems, it assumed subscriber numbers provided represented paying customers.  It turns out many weren’t.

Then there were more surprises:

Sen. Stein suggested legislation that could keep the United States behind in broadband adoption was of concern to him.

• Leamon Brice, Davidson town manager, told the Davidson News, “After the borrowing, but before the closing, Time-Warner, custodian of the system for one year, announced there were many more customers in the system than originally thought. As a result, the towns had to spend $12 million of the $80 million to buy those additional customers. This left less money for the upgrade of the system, so the towns borrowed an additional $12 million to complete the necessary improvements.”
• An economic crisis which is driving down subscriber rates for cable services nationwide.
• The early unavailability of a “triple play bundle” combining telephone, video, and broadband service on one bill.  Bundling is the economic driver of today’s telecommunications industry, and the two communities were late to get in on it.
• The high cost of system upgrades, especially with a system administered by Adelphia, which let most of its cable properties fall into disrepair long before bankruptcy.

Although Hoyle called out both communities for their losses, his numbers don’t add up.  He claimed the systems will lose $6.8 million dollars a year, based on one quarterly loss statement he chose to multiply by four.  In fact, the communities are seeking a one time $6.4 million allocation in the 2010-11 budget year, of which Davidson’s share is $2 million, to make up for the losses associated with all of the drama surrounding the Adelphia system purchase and upgrades.

Hoyle ignored the potential for MI-Connection, now that the upgrades are near completion and the company has introduced an aggressive triple-play package.  Revenues are up nearly 10 percent over the same period last year — an impressive result during an economic crisis.  Most of that growth came from newly launched broadband and telephone services.

The system needs only a few thousand additional customers to erase the losses.  Offering a compelling triple play bundled service package should help them achieve that goal.

Despite the difficulties associated with Adelphia’s legacy cable systems, most of the municipal broadband projects Hoyle seeks to stall are actually 100 percent fiber-based and are designed to service both residential and business customers with service far beyond what the local cable and phone companies are willing to provide.

The committee then heard input from speakers in the audience, with a two minute limit.  Unfortunately, that was too long for at least some committee members who chatted audibly as speakers tried to make their points.

One of those speaking in favor of the proposed draft was Octavia Rainey, once again seated with the lobbyists from Time Warner Cable and AT&T.  She arrived at the microphone with her practiced talking points.

After Rainey’s prior comments on this issue, we reached out to Ms. Rainey to get a better understanding of her point of view and establish a dialogue. When I attempted to speak with Rainey, she first hung up on me only to call back several minutes later to accuse me of being a “white supremacist,” even though I had revealed to her I also serve as a Human Relations Commissioner in Greensboro and fight against racial prejudice daily.

Such over-the-top accusations are not unheard of in this policy debate, particularly with some civil rights groups who attempt to shut down debate with accusations of bias when their public policy positions do not comport with the stated founding principles of that group. Usually, when this card is played, it comes when you’ve successfully called out the empty rhetoric and fact-challenged talking points most of these groups use to defend big telecom. Rainey is just another example of a well-meaning local community activist who has been duped by telecom astroturfing efforts, and AT&T’s financial involvement in causes helpful to her public profile don’t hurt either.

The litmus test for astroturf snowjob detection is simple:

• Will the constituents these individuals and groups claim to represent be well-served with a protected duopoly in broadband that prices service out of their reach?
• Has the group fully and publicly disclosed their financial contributions from telecommunications companies and the amounts given?
• Are there telecom company representatives serving on the board of the group?

Too often, following the money is all that’s required to understand the allegiance some groups and individuals have to adopting the telecom agenda.

At the end of the discussion, a vote was held and the draft bill passed.  There were only two audible “no” votes — from Representatives Jennifer Weiss (D-Wake County) and Paul Luebke (D-Durham).  I was told Senator Josh Stein (D-Wake County) also voted no, stating he did not “shout it out, but I definitely voted against the bill.”

The draft bill now goes to the House and Senate leadership to be assigned to committees.  If it survives the committee process, it moves to the full House and Senate.  I understand that leadership in both the House and Senate do not want anything controversial in the short session to follow, so let’s let them know nothing is more controversial than legislation that guarantees slow and expensive broadband from existing providers, indefinitely.

Make sure you let the North Carolina legislature know that now is not the time to ram through a provider-friendly municipal broadband bill from Senator Hoyle.  Tell Speaker Hackney and President Pro Tempore Basnight the issue requires further study, and the bill should be referred back to appropriate committees for further review:

Speaker of the House Joe Hackney (D-Chatham, Orange, Moore) 919-733-3451 [email protected]

President Pro Tempore Marc Basnight (D-8 Coastal Counties) 919-733-6854 [email protected]

Senator Hoyle's legislation lays the foundation for cable and phone companies to spend hundreds of thousands of subscriber dollars to mail smear campaign pieces like this one from Comcast.

(This piece is written by Jay Ovittore and Phillip Dampier.)

The good news is that all the pushback on an all-out-moratorium on municipal broadband was successful and Senator David Hoyle (D-Gaston) withdrew the idea.  The bad news is he had an even worse idea to replace it.

Hoyle Wednesday unveiled a new draft bill that hopelessly ties up municipal broadband projects into knots of red tape that, if passed into law, will bury municipal broadband projects in North Carolina indefinitely.

Hoyle sprung his telecom-industry-friendly legislation on the public after getting plenty of input and encouragement from the state’s cable and phone companies who already knew what was in it because they helped craft it.

For a retiring state senator who doesn’t have to worry about the next election, what better parting gift can you give to your friends in the cable and phone industry than a bill that preserves the comfortable duopoly they’ve  enjoyed for years.

Hoyle and those supporting the legislation will argue their bill doesn’t ban municipal broadband — it simply places conditions on such projects before they can go forward.  But what are those conditions?

Section One of the draft bill requires local governments to get funding for “external communications services” (ie. municipal broadband) by way of a General Obligation Bond (a GO Bond).  In North Carolina, that requires a taxpayer-funded referendum to be held for public input at the next election.

On the surface, getting public approval for municipal broadband isn’t a bad idea — no local government official expecting to win re-election would ever proceed on such projects without voter support.  But this requirement also gives plenty of advance notice to incumbent providers that a new player could be invading their turf.

We know what that means.  A well-funded opposition campaign to demagogue the project.  Local cable companies can insert an unlimited number of free ads during every advertising break to slam the proposal.  Phone companies can release a blizzard of opposition mailers to convince consumers it’s as scary as Halloween — all tricks and no treats.

How can a local city or county government respond to the misinformation barrage?  They can’t.  Public officials can’t spend taxpayer dollars to promote such projects or refute industry propaganda.  They can’t even financially assist a citizen-run campaign.

That’s a fight with ground rules only Don King could love.

In the end, that leaves ordinary citizens of North Carolina facing down a multi-billion dollar statewide consortium of telecommunications interests hellbent on preserving and protecting the status qu0.

The earlier-discussed moratorium was a brick wall against municipal broadband.  Hoyle’s bill is the Great Wall of China with the logos of AT&T, Time Warner Cable, and CenturyLink plastered all over it.

But wait, there’s more.  To deal with municipal broadband projects that got an initial green light to dare to interfere with the phone and cable industries’ grand business plans, another provision provides a near endless supply additional referendums to get rid of the projects.  Hoyle’s bill actually demands more votes should existing systems need:

• refinancing to reduce the interest rate or restructure existing debt;
• to make repairs to the system’s “fixtures;” and/or
• to upgrade the system to meet subscribers’ needs.

Ponder the insanity:

• The legislation could be interpreted to demand a public referendum if your service goes out.  Can you wait until the next election to get back your cable service?
• If a municipal broadband fiber cable falls in your backyard, does it make a sound?  It won’t, but you will when you learn that cable might not be reattached to the pole until the whole town holds a referendum about it;
• Would you be upset if your local municipal provider could refinance its debt at a much lower interest rate, letting them cut their prices, but they can’t before the next election?
• While cable and phone companies refuse to upgrade their service to levels that would have made such municipal alternatives unnecessary, they also want to make certain the one provider that did meet your needs can’t upgrade… without a public vote.

These systems are not constructed with public tax dollars, but Senator Hoyle wants every citizen in a community, subscriber or not, to ponder the future of a local municipal broadband provider.  It’s like giving AT&T veto power over Time Warner Cable’s channel lineup.  Guess who has to pay for these constant referendums?  Taxpayers.  So while Senator Hoyle complains municipal broadband costs the state tax revenue, his legislation guarantees increased government spending on pointless referendums.  That’s logic only a politician working for the interests of big cable can appreciate.

For the cable and phone companies, and their good friends in the North Carolina legislature, this is their idea of a level playing field.  In reality it’s about as level as a downhill ski run.

Let’s extend that “fairness” out to incumbent cable and phone companies and consider whether you got a vote on:

• Whether or not the cable and phone companies got to put their wires on phone poles plunked down in front of your house;
• Whether or not you wanted either company to dig up your yard to bury their wiring;
• Whether you wanted that giant metal refrigerator-sized metal box installed on your street, in your yard, or on the phone pole you see from your window every day;
• Whether or not you want the cable company to repair Mrs. Jenkins’ problems with HBO up the street whenever it rains or replace the cable the squirrels chewed up;
• What channels and services you want to pay for, which ones you do not, and at what price you need to pay your local phone or cable company.
• What cable or phone company gets to provide service in your community.

Apparently the fairness concept only applies to potential new competitors, not the existing providers.

Let’s also consider the cable television industry didn’t just magically bloom into a multi-billion dollar business without government help.  In the early days of cable television, investors were assured that they were financing a monopoly provider, guaranteed through a franchise agreement process that gave newly built cable companies exclusivity to help repay construction costs.  Franchise wars broke out between 1978 and 1984 as competing companies promised the moon with state-of-the-art two-way cable systems with the capacity to offer 70 or more channels.  The players then included Time’s American Television and Communications Corporation, Warner’s Amex, and Telecommunications, Inc. (TCI).  ATC and Amex would later evolve into Time Warner Cable and TCI became AT&T Cable before being sold to Comcast.  Communities seeking cable television for their residents would later learn a lot of these promises made were promises broken – reneged on by large cable companies with few, if any consequences.

During the Reagan Administration, then-FCC Chairman Mark Fowler bestowed additional deregulation benefits on the cable industry.  The Museum of Broadcast Communications explains:

The Cable Communications Policy Act of 1984 addressed the two issues that still hindered cable television’s growth and profitability: rate regulation and the relative uncertainty surrounding franchise renewals. Largely the result of extensive negotiation and compromise between the cable industry’s national organization, the National Cable Television Association, and the League of Cities representing municipalities franchising cable systems, the act provided substantial comfort to the cable industry’s future.

Its major provisions created a standard procedure for renewing franchises that gave operators relatively certain renewal, and it deregulated rates so that operators could charge what they wanted for different service tiers as long as there was “effective competition” to the service. This was defined as the presence of three or more over-the-air signals, a very easy standard that over 90% of all cable markets could meet. The act also allowed cities to receive up to 5% of the operator’s revenues in an annual franchise fee and made some minor concessions in mandating “leased access” channels to be available to groups desiring to “speak” via cable television.

Additional reforms guaranteed pole attachment rights to the cable industry so they could wire and service their network unencumbered by utility company interference or high pole attachment fees.  Cable consolidation allowed formerly mom and pop cable systems to become part of a cable industry where just a handful of cable companies provide service to the majority of cable households.  Countless millions are spent each year by the industry to lobby state and federal governments to keep the party going without regulatory interference, suggesting competiti0n alone is the only regulation required.

Except when a new competitor enters the market, of course.  Fearing competition from municipal providers who will force cable and phone companies to charge reasonable rates and upgrade service, the best possible solution is to find a way to ban such projects.

Forcing regular referendums and the complexities and expenses associated with them guarantees no community in North Carolina would ever bother with the onerous requirements to launch municipal broadband projects.

That’s not just Jay and I saying that.  What Hoyle has proposed hardly breaks new ground.  It’s the same dog and pony show the industry has brought to other states to stop competition and keep prices high and service slow.

So let’s learn from the painful experiences of others:

First lobbying for legislation requiring referendums and then winning it, SBC (later AT&T) and Comcast used the opportunity to spend more than $300,000 of their subscribers’ money to launch a major misinformation campaign with misleading and inaccurate mailers that successfully fought off a proposition to deliver better and cheaper service through a municipal broadband project in Batavia, Geneva, and St. Charles, Illinois.  Fiber for Our Future documented the whole sordid affair from start to finish as a lesson to others confronting industry-backed referendum requirements.

[flv]http://www.phillipdampier.com/video/unproven.flv[/flv]

Want a preview of the distortion and misinformation-campaign cable and phone providers will bring to stop municipal broadband?  Watch this SBC (today AT&T) executive tell city officials in Illinois that fiber is “unproven,” that the phone company’s DSL speeds are comparable to Comcast Cable, and that consumers don’t need the 3Mbps speed the company was delivering back in 2004 when this video was taken.  “What are you going to do with 20 megabits.  I mean, it’s like having an Indy race car and you don’t have the race track to drive it on.”  (3 minutes)

Longmont, Colorado spent years suffering with bad broadband service from Comcast and Qwest and sought a better alternative with a municipally-run provider.  But then the cable and phone giants spent $200,000 to put a stop to that.  While local subscribers may have preferred that $200,000 be used to reduce their rates, for Comcast and Qwest it was an investment in maintaining future pricing only duopolies can achieve, all while delivering “good enough for you” broadband service to Longmont residents.  In 2006, the Baller Herbst Law Firm collected information on industry-backed barriers to municipal broadband, and the list went on for nine pages.  Many of them sound eerily familiar to what Hoyle proposes (after cable and phone companies whispered time tested, industry proven ideas into his ear).

The city of North St. Paul, Minnesota has advice for states like North Carolina after their own experience with a coordinated industry-backed smear campaign against municipal broadband enabled by legislation similar to what Hoyle proposes:

What should be of interest to all communities was the organized opposition.  It appears that the incumbent providers, industry associations and politically conservative think tanks teamed up to promote negative news stories, do polling and opposition phone calls, provide transportation for identified “no” voters and create web sites.

While we heard some advocates lamenting this high priced anti-municipal fiber effort, this response is something that community leaders must expect and be prepared for.  A strong community education and mobilization effort must be a part of any municipal telecommunications initiative.  A coalition of business owners and residents must be created and maintained that can counter the expected efforts of the incumbent providers.  The benefits of the community-owned network should be documented and promoted so that an overwhelming majority of voters will choose to vote yes.  We hope that, one way or the other, North St. Paul gets the “More, Better Broadband” that the MN Broadband Coalition supports.

Of course, when local communities are banned from spending a nickel on advocacy for their projects, it effectively hands a restraining order to broadband advocates who can’t even get on the playing field, level or otherwise.

Outraged yet?

It will only get worse if Hoyle’s bill ever becomes law.  Residents in communities like Salisbury endured a sampling of the kind of negative campaign this industry will launch wherever municipal broadband competition threatens to appear.  In 2009, residents were hassled with push-polling phone calls from industry-backed astroturf groups claiming to represent ordinary citizens, but were actually little more than sock puppets for big telecom.  Your mailbox will be filled with blizzards of misleading mailers that current cable and phone customers pay for.  If they need more money, they can always raise your rates to cover the difference.  In the end, with the help of elected officials who don’t care about North Carolina consumers, existing municipal projects can bleed themselves dry (later to be used by the industry as “failed examples” to claim such projects are too risky to try) and proposed ones will never see a spade plunged into the soil to bury the first strand of fiber optic cable.

But it’s not all bad news.  It doesn’t have to happen this way.  You can tell your state representative you are watching them like a hawk on this issue.  Any “yes” vote for legislation like that proposed by Senator Hoyle is a no vote for them at the next election.  Let them know you are well aware of the game plan here — it has been tried in other states with similar legislation that is little more than protectionism for big telecom. Tell your elected officials you already have the power to choose whether or not you want these projects simply by voting for or against the elected officials that propose them.  While the concept of a referendum sounds fair on the surface, it’s not when you consider the past experiences of other communities who faced well-funded opposition campaigns, helpless to correct the record or fairly argue their position on the matter.  Providers know that, which is why they advocate this type of legislation in the first place.  It effectively stops competition, stops better service, and stops North Carolina residents from enjoying lower priced cable, phone, and broadband service.

There are a few stand-up representatives of the people of North Carolina who do deserve our gratitude and thanks today.

Rep. Paul Luebke, (D-Durham County) (who co-chairs the Revenue Law Study Committee) [email protected] 919-733-7663 College Teacher

Rep. Jennifer Weiss, (D-Wake County) [email protected] 919-715-3010 Lawyer-Mom

They both will likely face fierce opposition from the incumbent providers and their fellow legislators. Please take the time to thank them for standing with consumers today and for trying to protect the future of North Carolina and its economy.

Stop the Cap! will have video of today’s remarks by both legislators soon.  We hope to follow with a complete video record of today’s events surrounding the anti-competition legislation proposed by Senator Hoyle.  It will serve as a testament to just how much work we have to do to remove legislators who have stopped representing the public interest, and renew our support for those who stand with consumers.

Meanwhile, check out these two delightful pieces paid for by the cable and phone industry, sent to homes where municipal broadband projects faced a referendum in 2003 and 2004.  More than a dozen different mailers were sent to every home in the communities of Batavia, Geneva, and St. Charles, Illinois from phone and cable companies.  Now imagine the repercussions when not one of those communities could respond with their own mailers correcting the record and giving their side of the argument.  There is a reason why special interests spend enormous sums of money to protect their turf, and the battle is over before it even begins when those interests demand the other side not have the opportunity to respond in kind.

What smears do providers in North Carolina have in store for you?

… Continue Reading

More than 300,000 residents from Louisville to Lexington in Kentucky and north into Indiana were left with no cable service for more than nine hours today after an equipment failure at an Insight Communications office on Okolona Road wiped out analog cable.

Louisville cable viewers channel flipping up and down the dial found nothing but frozen pictures, a captured moment in time from 2:53am this morning.  What they found next when calling Insight was nothing but hours of busy signals.  Some customers in southern Indiana found some channels worked fine while others did not.  In all, the outage impacted at least some channels across most of Insight’s service area in Kentuckiana.

Louisville, Kentucky

Insight initially blamed the problem on a router failure that developed during routine overnight maintenance.  A backup router also failed at the same time.  Company officials originally anticipated service would be restored by six this morning, but that did not come to pass.

Because the equipment failure had never been seen before by Insight technicians, it took nearly nine hours to finally resolve the problem.  Local television stations were deluged with calls from viewers wondering what happened to their favorite shows, and Insight’s dropped ball was topic number one on most local talk radio programs today.

Insight subscribers were especially upset that they couldn’t reach the cable company for answers.  Customer service lines were left jammed through much of the day.

Insight spokesman Jason Keller apologized for the outage.

Subscribers either saw this message, or a frozen picture across their channel lineup this morning.

“Everything that we have has a redundancy built into it. This is no different, but unfortunately on this particular morning with this particular piece of equipment, both the main equipment and the backup did not function properly,” Keller said, calling the outage “highly unusual.”

Keller called today’s outage the largest that he has seen during the company’s 10 years of service in Louisville.

By 10:00am, Louisville customers had their HD channels back, with the remaining analog channels restored by 1:30 this afternoon.

Despite the severity of the outage and its widespread impact, Insight Communications is refusing to issue blanket refunds to affected customers.  Instead, individual customers have to call or contact the company and request a refund, which they characterize as an amount under $1.00.

Customers can cost Insight more than that just by availing themselves of that option, and registering their displeasure over today’s long-lasting outage.

Impacted customers can request a refund online or by phone at (502) 357-4400.

Most television newscasts in the Louisville area treated today’s outage as their top news story, with several issuing periodic updates throughout the morning into the afternoon about the service problems.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WAVE Louisville Equipment problems cause loss of service for Insight customers 5-4-10.flv[/flv]

WAVE-TV in Louisville told viewers “it’s not our fault” that Insight subscribers couldn’t watch the station for at least nine hours today.  (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WLKY Louisville Insight Experiences Cable Outages 5-4-10.flv[/flv]

WLKY-TV in Louisville said it received tons of calls from concerned viewers, one of whom was upset that the company “doesn’t want to give customers answers.”  (2 minutes)

[flv width=”432″ height=”260″]http://www.phillipdampier.com/video/WHAS Louisville Technical Problems at Insight 5-4-10.mp4[/flv]

WHAS-TV, also in Louisville spent time outside of WHAS Radio’s studios this afternoon covering angry reactions from Insight customers on local talk radio.  (2 minutes)

[flv width=”432″ height=”260″]http://www.phillipdampier.com/video/WHAS Louisville After Nine Hours Insight Restores Service 5-4-10.mp4[/flv]

WHAS followed up its earlier report with a wrap-up during its early evening newscast explaining what caused the nine hour outage.  (3 minutes)

[flv]http://www.phillipdampier.com/video/WDRB Louisville Insight Outage Ends 5-4-10.flv[/flv]

WDRB-TV in Louisville explained to its viewers how they could get their money back for a day’s worth of frozen pictures.  (2 minutes)

One in eight Americans are poised to drop or curtail their cable, satellite, or telco-TV packages in the coming year because the bill has gotten too expensive, according to a new study.

With an average cable bill now $71 a month and rising an average five percent a year, middle class consumers are being priced out of pay television according to the Yankee Group.  The Boston research firm conducted the study of cable, satellite and telephone-company IPTV services and surveyed 6,000 consumers from across the country.

“At the most basic level, the decision to cut off pay TV services is an economic one,” says Vince Vittore, principal analyst and co-author of the report. “As programmers continue to demand ever higher fees, which inevitably get passed on to consumers, we believe more consumers will be forced to consider coax-cutting.”

Coming on the heels of a steady erosion away from traditional telephone landline service which has threatened the fortunes of major phone companies, the implications of millions of consumers coax-cutting are not lost on cable operators or phone companies getting into the IPTV business.

Back to the Future: Older Americans Going Back to Rabbit Ears When Confronted With Today’s Cable Prices

Retro TV is a network that piggybacks on digital television sub-channels in many cities across the country. The network airs classic television shows popular with older audiences.

Those dropping service often take diverging paths for their future entertainment in a cable-free household.  Among older consumers, especially those on fixed incomes, it is back to the future with over the air television and a pair of rabbit ears or rooftop antenna designed to receive digital television broadcasts.

Among these consumers, the most common reason for canceling service is cost.  Many signed up for cable in the 1970s and 1980s for better picture quality, and with the right rooftop antenna, last year’s conversion to digital television solved that problem for over the air viewers.  Post-cable, many are pleasantly surprised to discover new channels piggybacking on traditional stations, several offering classic TV shows from decades past that are familiar and welcome in older Americans’ homes.  Even better — no confusing equipment to deal with.

Jesus Chea, 59, of Queens, told the NY Post he ditched his Time Warner subscription “because I’m on a fixed income and I believe it’s not worth the money.”

To get around the $136 monthly bill, the retiree, who lives with his wife and two grown sons, had antennas installed on both of his TVs — at a cost of $298 — taking advantage of last summer’s national conversion from analog to digital broadcasts.

“Antenna is great,” he says, “because they don’t charge you for rent on digital boxes and they don’t charge you for the remote control. When you add up all those extra fees and so many extra [cable] charges, even if it’s three or four extra dollars, they all add up.”

For many others, the arrival of Redbox video rental kiosks in area grocers has replaced the HBO subscription, and has proven to be a worthwhile supplement to the coax-cutter who drops cable service altogether.

The savings from cord cutting can be dramatic.  Some have saved upwards of $60 a month — $720 a year just by dropping the cable-TV part of their package.  Those kinds of savings have become important when wages are frozen or in decline, jobs are hard to find, and everything else is still going up in cost.

The cable industry has never imagined a country where consumers have quit cable (or satellite) and gone “cold turkey,” especially when upwards of 90 percent of Americans pay for some type of entertainment — pay television, movie rentals, or broadband video.

But as the Yankee Group discovered, Americans are simply tapped out.

Your Father’s Cable TV: Why Would Anyone Under 30 Subscribe?

For younger Americans, the addiction to cable or pay television was something that afflicted their parents.  They never had a problem dropping service from a cable company with whom they never did business.  The teens and twenty-somethings have spent most of their video dollar on broadband and DVD’s for much of their viewing, not cable.

Younger cable subscribers are most at risk for coax cutting, rationalizing they can watch most of their favorite shows online through services like Netflix, Hulu, or websites run by the major American networks.  Others download content (legally or otherwise), rent or buy DVD’s, or subscribe to services like Netflix which combine video streaming with DVD rentals-by-mail.

Many of these viewers also own devices that can bring web-based viewing right to their 50-inch television sets, using set top boxes or video game consoles with web connections.

“Admittedly, this is a small phenomenon now, but a number or recent transactions and new items point to a shift in consumer thinking,” said Vittore.

With the increasing ubiquity of Internet-capable devices, the challenge to traditional coax-based cable TV has never been greater.

“Just like with telephone land lines, it’s going to become hard to sell pay TV to anyone under 30,” Vittore said.

Provider Revenge: You Won’t Get Away That Easy!

With billions of dollars at stake, providers and content producers are intent on not allowing a repeat of what happened to the newspaper industry to afflict their business plans.  Giving it all away for free is not their idea of a sustainable business model.  Keeping tight control over content and its distribution is their ticket to maintaining profits.

Many Olympic events were not aired on NBC television, instead moved to NBC Universal-owned cable networks.

Older Americans who’ve gone back to over the air television are least susceptible to provider revenge, but content is still king and the cable industry will own an increasing percentage of it if the NBC-Comcast merger is approved.  While the two companies are currently promising not to dispense with free over the air broadcasting, an increasing amount of content could be diverted to pay television channels like cable sports networks, movie networks, and general interest basic cable channels.  Broadcasters themselves are now hungry for the same dual-revenue stream their cable competitors already enjoy – advertising income and subscription fees.

Most of the coming wars over pay entertainment are expected to be fought on the broadband battlefield.  For younger Americans relying on Hulu and other video streaming services, subscription fees are coming.  Hulu promises to keep some free viewing options open, but additional access to back episodes or certain series are likely to be restricted only to those who agree to pay an anticipated $9.95 per month.  The cable industry’s own TV Everywhere streaming services offers a clearer dividing line — its available only for those who maintain their pay television package.

Broadband providers, often the same companies that stand to lose from the retreat from television subscriptions, are considering making up the difference with limits on broadband service to make sure consumers can’t watch too much online, or charging consumption fees for heavy online viewers to make up their losses on the TV side.

The long-standing business relationship between content producers and distributors, such as those between Hollywood studios and cable companies, have led to a united front against would-be competitors.  For consumers seeking access to the latest Hollywood movies through low cost rental services or online video, expect to wait longer.  The window of time between a movie release in the theaters and when it becomes available for rental through Redbox or Netflix is growing longer to protect video-on-demand revenues for the cable industry and DVD sales for Hollywood.

Some consumers don’t mind the wait, but are still regularly reminded what they can miss when they don’t agree to a monthly pay television bill.

Jeremy Levinn, a 27-year-old personal trainer from Manhattan, told the Post he jumped the cable ship last year, but Time Warner Cable reminded him whose still boss during the Olympics, when numerous events were available only on Universal-owned cable channels including USA, CNBC and MSNBC and not broadcast over the air.

[flv width=”384″ height=”236″]http://www.phillipdampier.com/video/CNN Converging Broadband and Television April 2010.flv[/flv]

CNN aired this review of the next generation of television sets capable of connecting with your broadband service to receive television shows and movies over the Internet.  (4 minutes)

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/PBS Bill Moyers Michael Copps Interview About Net Neutrality 4-23-10.flv[/flv]

Last Friday, Federal Communications Commissioner Michael Copps appeared on PBS’ Bill Moyers’ Journal.  He discussed the current state of America’s broadband industry, the implications of not having Net Neutrality protections, and how the Internet is transforming public debate and citizen-powered democracy across the country.  (4/23/2010 — 23 minutes)

BILL MOYERS: The industry wrote a letter to the commission and said that advocates of an open Net who are coming to the FCC and asking you to reclassify what you do as telecommunications want to steer the debate, and I’m quoting from the letter, “in a radical new way.” I mean, they’re calling you extremists and they’re calling you radical.

MICHAEL COPPS: Because I want to call telecommunications, “telecommunications” and go back to the openness that has characterized the net since it was first invented in the laboratories of the Department of Defense. That’s not extreme. That’s not radical. That’s called going back to basics. That’s called consumer protection 101.

BILL MOYERS: How threatened is the whole idea of an open Net?

MICHAEL COPPS: Oh, I think very. I think very. I think there are powerful players that are opposed to it. Are in a position to make their influence felt. None of these things are going to come easy. We’ve just been through the health insurance debate. We’ve got the financial debacle. None of this stuff gets solved without taking on taking on a fight. The government doesn’t work that way. You’ve studied this history, I’ve studied this history. It’s painful, it needs movements, it needs grassroots support, it needs the people.