August 2011

T-Mobile pioneered the notion of throttling data speeds rather than charging overages for those who use up their allotted data amount in a given month. Now the company has decided it needs to start assessing overage charges on its lowest-end data plan.

“Customers will incur overages of $0.10 per MB when they exceed 200MB of data ($10 for 100MB) up to a maximum monthly payment of $40 with both Value and Classic plans for data including the 200MB add-on fee,” T-Mobile said. The company typically charges between $5 to $10 for its basic data plan, which includes just 200MB of monthly data usage. T-Mobile said it will start notifying customers when they reach 90 percent of that level, and then again when they hit the 200MB limit, offering them the option to move to a higher-end data plan. The changes are effective Aug. 14.

This order adds the statutory language from the Protecting Children in the 21st Century Act regarding the education of students about appropriate online behavior to the existing Federal Communications Commission rules implementing the Children’s Internet Protection Act (CIPA) for the schools and libraries universal service support mechanism (also known as the E-rate program).

The FCC’s CIPA rules were also implemented at the direction of Congress, and school and library E-rate applicants that seek to receive discounts on Internet access or internal connections have been required to certify their compliance with CIPA since 2001. The Protecting Children in the 21 st Century Act directs E-rate applicants to also certify that their CIPA-required Internet safety policies provide for the education of students regarding appropriate online behavior including interacting with other individuals on social networking websites and in chat rooms, and regarding cyberbullying awareness and response. The FCC implements this statutory language verbatim. The FCC also makes minor non-substantive revisions to rules to conform to existing statutory language from the CIPA statute where necessary.

[Commentary] Two ways to look at the Communications Workers of America (CWA) strike against Verizon are mirror images of each other:

First: Why should the striking workers have it better than everyone else? Why should they get away with having paid-for health care and time off and all the other things that the company now wants to take away?

Second: Why don't other workers have it as good as the striking workers? Why don't other people have paid-for health care and time off and all the other things that Verizon now wants to take away?

Financially, Verizon is doing well, with more than $30 billion in profits over the last three years on which they have paid no taxes — and even got $1 billion in tax benefits. Verizon wants to do away with paid health care, cutting disability benefits, reducing sick days and holidays, to name just a few items on the bargaining table. Why? In most sectors, there is international competition depressing prices and competition to see who can hire the cheapest overseas labor. But telecommunications is not one of those sectors. The industry has the type of jobs not easily shifted overseas. Maintaining a telecom network and serving customers has to be done by people in the area. Verizon is stuck with American workers and their salaries and benefits.

But with whom is the company concerned about remaining competitive? It has a near-monopoly on landline businesses and could soon find itself in a duopoly on the wireless side of which it now has close to 40% of the business. If any companies are sitting pretty these days, phone companies come the closest. The industry has dominated the regulatory apparatus so that, in the name of “deregulation,” most competition and consumer choice has been eliminated. It has spread sufficient wealth in the legislature to members of both parties so that any attempts to impose any rules that enable competition, fairness or consumer choice are met with immediate denunciations and angry letters with many signatures.

Why, with the company taking such a hostile attitude toward its workers, would the union stroll arm in arm with Verizon (and with AT&T for that matter) through the telecom public policy world supporting policies that hurt consumers? What benefits can they possibly derive from supporting the companies’ efforts to do away with an Internet in which everyone has an equal opportunity to get online? Does the union think that by supporting AT&T’s takeover of T-Mobile that the company will go easier on them when their contracts come up (even as the odds of the deal happening are dropping)? Why does the union defend the companies at every turn, even defending the loss of jobs because the traditional wireline business is fading?

It would be nice if coming out of this strike, and anticipating negotiations with AT&T or other companies, CWA would take a more enlightened stand toward consumers generally, along with concern for union members and jobs. Given the union’s history, however, it’s not likely.

Gov. Bill Haslam (R-TN) said that he would like to have questions about Amazon’s tax status resolved by the end of the year, preferably with the online retailer collecting sales taxes from Tennessee consumers.

“We'd like to work out some arrangement that works for them to stay and grow in Tennessee and yet for us to collect the sales tax that we need,” Gov Haslam said. “We would hope to do something prior to the legislature coming back” in January. Questions about Amazon’s tax status have been mounting as the company has rolled out plans this year to open distribution centers in Lebanon, Chattanooga and Cleveland. The centers represent Amazon’s first physical presence in Tennessee. Some lawmakers have argued that this should force Amazon to start collecting sales taxes under rules set out two decades ago to distinguish catalog companies from traditional retailers. Amazon argues that it should not have to collect taxes because it does not have any storefronts in Tennessee.