Category Archives: Jeers

It's a really bad time to be Vonage. As if being smacked around in court by Verizon wasn't enough, the legal woes were compounded when a similar patent infringement suit from Sprint came down in favor of the large wireless carrier. Vonage tried to move quickly past it by agreeing to settle for a cool $80M that settles past infringement and buys them a license. That's gonna hurt, especially since Vonage lost their appeal against Verizon and will have to cough up another $40M in that action. All of this "we patent teh internets" craziness highlights the pressing need for patent reform to restore competition to the technology sector.

FCC Chairman Kevin Martin thinks something is rotten in the state of cable television. In fact, he suspects industry groups are trying to astroturf opposition to a la carte pricing as a way to try and sway public opinion. Martin is a vocal supporter of a la carte cable television, allowing you to buy and pay for just the channels you want. Congress has been sitting on a bill authorizing the FCC to enforce a la carte pricing since June.

A lawyer in LA got tired of waiting. Maxwell Belcher decided to file a class-action anti-trust suit against cable giants alleging unlawful restraint of trade by forcing us to buy bundles we didn't actually want. The goal is to force the end of the bundle of 85 channels (of which only 16 on average get watched) to drop pricing for all cable TV users. Go get 'em, tiger.

News is breaking that HomeNet, the first iProvo provider that later went belly-up, may have forged a letter of credit to secure the exclusive contract. These charges are in addition to others that allege the company cheated investors out of about $1M during its lifetime. Even more disturbing is that there seems to be a bunch of companies owned by HomeNet principles that are trying to squeeze money out of the failed venture claiming that they are creditors. That sound, ladies and gentlemen, is your Skeeze-O-Meter going off the charts.

There isn't too much cohesive about these stories other than showing how badly AT&T and Verizon treat their customers.

For starters, why don't we talk about SBC's actions in South Africa? They were part of a consortium granted exclusive rights to build the nation's telecommunications infrastructure after the end of apartheid. What ended up happening, however, is that they took all of the money and delivered none of the infrastructure. Now SBC is a big chunk of the new AT&T conglomerate. Hmmm… sounds familiar to our own $200B rip-off, doesn't it?

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I guess Comcast figured that no explicit requirement for net neutrality was just an open invitation. The word on the street is that Comcast has now started breaking the ability to share torrent files outside of other Comcast users and seriously throttles your download speed when trying to grab a torrent. The cable giant has, naturally, gone into denial mode to CNet. Given their storied history of denials, I'm disinclined to believe the corporate spinmeister. This opens up a great marketing opportunity for Copowi, an ISP dedicated to offering Internet connections with the cost of guaranteed net neutrality built right in. (Yes, they're available in Utah.)

I'd imagine this has a bit to do with the reported bandwidth crunch facing all cable operators, something that will result in even more degradation on your TV and slower speeds for that "high-speed" Internet access. While Comcast has decided to use heavy-handed ways to cut usage, companies like Time Warner are going to pretend the problem doesn't exist and hype up their expanded video-on-demand services. I suppose it's just to hard to actually build a network that can handle the load when you're so busy counting those fat sacks full of cash money.

Typical of monopolistic incumbencies, Verizon has cut off copper lines in homes with FIOS to prevent customers from "downgrading" and having the option of picking their service provider. Their reading of the Telecommuncations Act of 1996 is that they are not required to lease lines to competitors on the shiny new fiber optic network like they were with the old copper infrastructure. This has left CLECs in a position of a shrinking potential market as Verizon aggressively builds out the fiber optic network, now serving over a million customer in their service areas and passing over 10 million homes. Given their past of neglecting copper infrastructure, it seems like Verizon is hoping to get everyone onto the more expensive service while shutting down as much competition as possible.

Meanwhile, Comcast has started buying out small cable operators to take over the last few markets not served by themselves, Time Warner, or AT&T. They've purchased a pair of systems in Colorado and one in Pennsylvania to add a measly 3,000 customers. The Colorado acquisition plays well with their dominance in nearby Denver. It may come that the day of the truly local cable or phone company will be dead before too much longer.

In a rash of related stories, it appears that a mixture of telco consolidation and lawsuits against VoIP providers is going to lead to fewer choices for broadband and phone service. Earthlink has been bleeding money for some time since dial-up subscribers have been fleeing in droves and it doesn't look to get much better as they lose access to DSL customers and the related copper infrastructure. In the process, they're betting the farmhouse on some high-profile WiFi deployments, most notably in Philadelphia. This is the same scenario at Covad, a provider of bandwidth to competing DSL carriers. The company recently announced that they would be laying off about 8 percent of their workforce as business lags.

Meanwhile, VoIP provider Vonage is still embroiled in Verizon's "we own the Internet" lawsuit, putting a damper on the company's future prospects. This is no doubt playing into SunRocket's decision to lay off about a quarter of their staff including several executives. It's also disheartening for these companies as more and more of the fees and regulations associated with normal phone lines are being mandated by the FCC, this time expanded to 711 for TTY and relay services. Combine that with aggressive expansion by both Verizon and AT&T, and it looks like we're heading for an even worse competitive environment than prior to the 1984 "Baby Bell" breakup.

With incumbents getting more and more entrenched and entering new markets a la Standard Oil, the need to keep infrastructure and retail services separate seems more necessary than ever.

(See additional articles here, here and here.)

Expect your TV bill to jump a few bucks by the end of the year. Citing the "new" CableCARD requirement from the FCC, the cable companies are claiming increased costs from supporting the 11-year-old standard first proposed under the Telecommunications Act of 1996. While most brand new TVs and other video devices include a CableCARD slot, most cable operators are hopelessly clueless on how to get the things to work and many give up in frustration, going back to renting the set-top boxes.

Charter Communications has already applied for and received a waiver for enacting the CableCARD requirements that went into effect on July 1 and Verizon is currently pursuing one for its FIOS operations. Anyone want to take bets on how many other companies are going to apply to be the exception to the rule?

(Read more articles here, here and here.)

Here's a pair of head-shakers for you. Verizon is starting to test a service where mis-typed domain names will instead present search results, much like Verisign's SiteFinder service that caused angry mobs to all but go to the company's offices with torches and pitchforks. The service works at the DNS level meaning that Verizon customers would not be able to bypass it. The biggest problem with this is the impact on tools that look for non-existent DNS records as a way to combat spam and could break other search tools you have on your computer. The obvious motivation is to sell ads on the new "Did you mean…?" screens to make a quick buck. (See full article here.)

And speaking of making a quick buck from ads, Texas ISP Redmoon has found a way to insert ads into web pages that never originally had them at the ISP level. You wouldn't be able to bypass this and it would be a wholesale violation of the intellectual property rights of website owners who spend countless hours building content and arranging it just so. These aren't pop-ups: they're displayed right in the page, modifying the source to insert them. It's also worth noting that this is a paid ISP, not a freebie like Juno or Netzero. (See full article here.)

Hopefully both Verizon and Redmoon will realize that they're on the verge of summoning angry mobs and angrier hackers.