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News summary for 11/16/07

Fri, 11/16/2007 - 9:06am
CED staff

Comcast customer sues company for allegedly blocking file sharing
By Mike Robuck

California resident and Comcast customer Jon Hart is suing the nation's largest cable operator over what he alleges are unfair business practices - interfering with subscribers' download speeds on peer-to-peer (P2P) file sharing programs, including BitTorrent. There are multiple Jon Harts in California; the plaintiff has no known association with the electronics industry.

According to the Associated Press, Hart based his lawsuit partly on the results of an investigation by the AP, published last month, which claimed that Comcast actively interferes with some high-speed Internet subscribers’ attempts to share files over the Internet.

Hart, of the San Francisco Bay area, filed the lawsuit in Alameda County Superior Court on Tuesday. The 22-page lawsuit alleged that Comcast’s practice of reducing speeds on P2P sites and Lotus Notes e-mail was unlawful and fraudulent.

Hart has asked the court to order Comcast to stop blocking P2P sites and apologize to customers for failure to provide the high-speed Internet connections that the company has claimed in advertisements. The class-action suit seeks unspecified monetary damages.

A Comcast spokesman said this morning that the company hasn’t been able to review the filing, but Comcast issued the following statement:

“Comcast does not block access to any Web sites or online applications, including peer-to-peer services like BitTorrent. Our customers use the Internet for downloading and uploading files, watching movies and videos, streaming music, sharing digital photos, accessing numerous peer-to-peer sites, VoIP applications like Vonage and thousands of other applications online. 

“We have a responsibility to provide all of our customers with a good Internet experience, and we use the latest technologies to manage our network so that they can continue to enjoy these applications. During periods of heavy peer-to-peer congestion, which can degrade the experience for all customers, we use several network management technologies that, when necessary, enable us to delay - not block - some peer-to-peer traffic. However, the peer-to-peer transaction will eventually be completed as requested.”

FCC Chair Martin looking lonely on anti-cable crusade
By Brian Santo

The two other Republican commissioners on the FCC are trying to pull back the reins on FCC Chairman Kevin Martin as he attempts to seize regulatory control of the cable industry. Commissioners Deborah Tate and Robert McDowell, typically Martin’s allies, recently published a letter pointing out the unreliability of the data Martin is using to justify his power grab.

Martin is relying on a clause in the 23-year-old Cable Act, which gives the FCC broad authority to regulate the cable industry should the industry meet two criteria: availability to 70 percent of U.S. households (long since exceeded) and 70 percent penetration of these households. According to the law, only operators with 36 or more channels are counted.

For years, the FCC has been relying on data on the latter measure compiled by Warren Communication News, which recently reported that cable has reached 71.4 percent penetration.

Tate’s and McDowell’s letter refers to comments by Warren Communications News’ editor, Michael Taliaferro, in Communications Daily, in which he said the reported penetration statistic is not entirely reliable for a variety of reasons.

Tate and McDowell wrote: “As you are aware, over the past three years, our Report has found cable subscribership hovers around 60 percent. With the increase in competition from satellite and phone companies, most large cable operators report a decline in subscribership. Thus, it was surprising to learn that Warren Communications reported a 71.4 percent subscribership rate this year, especially considering the two other major independent research outlets found rates at 61.1 percent (Nielsen) and 58.1 percent (Kagan).” The report referred to is the Commission’s annual report on cable.

Martin may try to shrug off the objection, because Kagan’s estimate takes into account all operators, not just those with 36 channels or more.

Nonetheless, with Warren Communications itself allowing that the data is not solid enough to be used for Martin’s purpose, with erstwhile allies on the Commission trying to put the brakes on, and with Martin’s chairmanship perhaps good only for another year or so (through the end of the current Administration - dependent on which political party’s candidate wins the 2008 presidential election), this might lead to a long enough delay for the cable industry to avoid heavier regulation.

WSJ: Google preparing to bid billions in spectrum auction
By Traci Patterson

Google is preparing to bid in the FCC’s wireless spectrum auction in January - on its own, without any partners - and is working out a plan to finance its bid, which could run $4.6 billion or higher, according to The Wall Street Journal.

The Web giant is currently running a test version of an advanced wireless network at its headquarters in Mountain View, Calif. If Google wins the spectrum, the testing would give the company some operating experience to run a full-scale national mobile network, the WSJ reported.

Google will most likely bid on the “C” block, a slice of the 700 MHz spectrum, although it is considering other blocks of spectrum, as well, the WSJ said. The bid could square Google off with the major wireless carriers, AT&T and Verizon, who need the spectrum to expand their broadband offerings and support advanced services such as mobile TV.

Google could make last-minute changes to its strategy before the FCC’s Dec. 3 deadline for declaring an intent to bid, but the company has said that it will reveal those changes by then.

In July, Google said it intended to participate in the auction of spectrum in the 700 MHz band if the FCC adopted a framework requiring greater competition and consumer choice. Google urged the Commission to adopt four open platforms as part of the license conditions: open applications, open devices, open services and open networks. The FCC has decided to support two of the open access principles: open applications and open devices.

Last week, Google - along with T-Mobile, HTC, Qualcomm, Motorola and other companies - announced the companies’ collaboration for the development of Android through the Open Handset Alliance. The alliance’s goal is to foster innovation on mobile devices and give consumers a better user experience through open standards.

The Android platform is a fully integrated mobile “software stack” that consists of an operating system, middleware, user-friendly interface and applications. The first Android cell phones are expected to be available in the second half of 2008.

Zayo forms managed services unit, acquires VoicePipe
By Brian Santo

Zayo Bandwidth has formed a business unit for managed services and has named Dennis Kyle president of the unit. Simultaneously, Zayo has acquired a retail VoIP services company, privately-held VoicePipe Communications.

VoicePipe will become part of the newly-formed business unit, called Zayo Managed Services. VoicePipe was spun out of ICG Communications early in 2006. ICG had established the operation to create a hosted PBX service offering. ICG subsequently was sold to Level 3 Communications. Terms of the deal were not disclosed.

Zayo Managed Services is offering a variety of services, including hosted PBX from the VoicePipe acquisition, videoconferencing and secure private data network services. The unit will also provide Web hosting and collocation, Internet access, equipment for rental or purchase, and IT services.

Kyle joins Zayo from Level 3, where he had been SVP for small to medium enterprise and indirect channels.

Zayo Bandwidth was recently formed with the intention of buying smaller local networks and combining them into a regional operation. The company recently completed four acquisitions: Onvoy, a 1,400-mile fiber network serving Minnesota; Indiana Fiber Works, a 2,200 fiber-route-mile network serving Indiana; PPL Telcom, a 4,600 fiber-route-mile network based in Allentown, Pa., serving areas in the Northeast; and Memphis Networx, a 200 fiber-route-mile network serving the greater Memphis, Tenn., area.

Verizon, Vodafone partner for global services
By Traci Patterson

Verizon Wireless has formed a global services cooperation with Vodafone, and the company has expanded its services in Michigan, New York, and along the eastern shore of Virginia.

The cooperation with Vodafone allows both companies to meet the needs of global business customers, while providing a consistent approach to products and pricing. Business customers served by a global account team will be able to have one contract to cover their mobile needs - in the U.S., Europe and elsewhere.

And customers in Kalamazoo, Mich., and the surrounding area, as well as consumers on Virginia’s eastern shore, now have access to Verizon’s high-speed Internet service. Customers in the Westchester County villages of Larchmont and Mamaroneck, as well as the town of Mamaroneck, now have access to Verizon’s FiOS TV service.

Nielsen’s Q3 revenues up
By Mike Robuck

On Wednesday, the Nielsen Co. reported that its third-quarter revenues were up 11 percent compared with the same time frame last year.

Nielsen, which tracks what people are watching on TV or buying though its various subsidiaries, reported revenues of $1.9 million in the recently completed third quarter, compared with $1.1 million in Q3 2006.

Excluding the impact of currency fluctuations and the deferred revenue adjustments in the last year, third-quarter revenues increased 7 percent.

Operating income for the third quarter of this year was $77 million, compared with $90 million in the third quarter of 2006. The company said its third quarter results were negatively impacted by $79 million in restructuring costs. As of Sept. 30, the company’s total debt was $8.3 billion, while cash balances stood at $340 million.

Broadband Briefs for 11/16/07

* Cox promotes Doris to GM of Cleveland system
By Mike Robuck

Cox Communications announced that Anne Doris was promoted to VP and GM of the company’s Cleveland operation. Doris will manage all operations of Cox’s Cleveland system, which includes 160 employees and serves more than 73,000 customers. Prior to her promotion, Doris was VP and system manager for Cox in southern Arizona.

* AT&T completes acquisition of wireless company
By Brian Santo

AT&T has wrapped up its $2.8 billion acquisition of Dobson Communications, a provider of wireless communications services under the Cellular One brand. With the acquisition, AT&T picks up nearly 1.7 million Dobson subscribers.

The merger also extends AT&T's wireless network coverage into a number of primarily rural areas in Alaska, Arizona, Illinois, Kansas, Kentucky, Maryland, Michigan, Minnesota, Missouri, New York, Ohio, Oklahoma, Pennsylvania, Texas, Virginia, West Virginia and Wisconsin.

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