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Anthem Buying Cigna For $54B In Yet Another Mega Insurance Merger

Fri, 2015-07-24 15:16

(Anthem)

(Anthem)

What a difference a month makes: Just a few weeks ago, Cigna rejected Anthem as a suitor, citing things like the major data breach the company suffered earlier this year and turning down its $47 billion merger bid. It seems Anthem has been busy a-courtin’, as the company announced this morning that it’s reached a deal to buy Cigna for $54 billion, effectively creating an insurance giant.

It’s the latest move by insurers looking to carve out a big chunk of the market for themselves through mergers — Aetna has also been in the buying mood lately, snapping up rival Humana early in July. Cigna had flirting with Humana for a bit as well, before rekindling talks with Anthem.

Now, Anthem says it’s buying Cigna in a deal worth $54 billion (including debt) that will create the nation’s largest health insurer by enrollment, with about 53 million U.S. patients falling under that umbrella, reports the Associated Press.

If the deal goes through, health care in the United States will be transformed, with five of the biggest health insurance companies morphing into just three, including UnitedHealth Group. The mergers come at a time when insurers are figuring out the national health care overhaul under the Affordable Care Act.

Mergers are good for these companies because larger insurers can hold more sway and negotiating power when settling on rates with care providers. But because what’s good for for-profit companies isn’t always good for consumers, these two mega deals still need to pass muster with antitrust regulators, to make sure that the insurers don’t grow so big that they can dominate the market.

Consumers won’t feel any effects from the mergers for at least a year, as companies have already set most of their plans for coverage that begins in January. Mergers could lead to fewer choices and some price changes for consumers, of course, which will depend on where they live and which companies already offer plans in their market.

The Wall Street Journal pointed out earlier in July when Aetna announced its merger with Humana that antitrust regulators were ready to look closely at any combinations among the biggest health insurers. According to WSJ analysis, the Aetna-Humana merger will increase the number of U.S. counties where at least 75% of Medicare Advantage customers are in the hands of a single insurer by about 180.

Anthem’s merger with Cigna will mean the company has a much broader base over which to spread costs and expenses, a point the company focused on in its first bid for Cigna in June. It’ll also allow it to make technology investments over the industry’s biggest customer pool.

At this point the deal is slated to close in the second half of 2016; Cigna stockholders have to approve the agreement first, and Anthem shareholders will have to approve the issuance of shares in the transaction: Cigna stockholders will receive $103.40 per share in cash and 0.5152 shares of Anthem stock for each of their shares.

Cigna’s President and CEO David Cordani will serve as president and chief operation officer of the new combined business, while Anthem’s Joseph Swedish will be chairman and CEO.

“We are very pleased to announce an agreement that will deliver meaningful value to consumers and shareholders through expanded provider collaboration, enhanced affordability and cost of care management capabilities, and superior innovations that deliver a high quality health care experience for consumers,” Swedish said in a statement. “We believe that this transaction will allow us to enhance our competitive position and be better positioned to apply the insights and access of a broad network and dedicated local presence to the health care challenges of the increasingly diverse markets, membership, and communities we serve.”

Anthem bids $48 billion for rival Cigna to create insurance giant [Chicago Tribune]

Ongoing Power Outage At LaGuardia Airport Delays Some Flights Three Hours

Fri, 2015-07-24 14:54
(edward.valio)

(edward.valio)

While a planned strike earlier this week by contracted baggage handlers and security workers was canceled, saving travelers from experiencing travel disruptions at two of New York’s airports, those passengers coming in and out of LaGuardia faced an interruption of their own on Friday morning when a terminal in the airport lost power. 

CNBC reports that a power outage was reported at about 6 a.m. Friday causing delays of up to three hours for many flights arriving at the airport.

“Due to current power outages affecting airlines operating in Terminal C, Parking Lots 4 and 5, flight disruptions may result,” LaGuardia Airport said in a notification to passengers. “Please check with your airline to determine if your flight is affected.”

The airport did not immediately provide information on what caused the power outage or how long it might last.

This is the fourth time in recent months that flights have been delayed because of issues with power or technology. Last week, Spirit Airlines suffered a computer glitch at O’Hare International Airport in Chicago, before that United Airlines grounded all flights from taking off for about an hour because of automation issues.

Power outage at LaGuardia Airport causes 3-hour delays [CNBC]

Consumerist Friday Flickr Finds

Fri, 2015-07-24 14:30

Here are ten of the best photos that readers added to the Consumerist Flickr Pool in the last week, picked for usability in a Consumerist post or for just plain neatness.

(andy briggs)

(andy briggs)

(Jason Cook)

(Jason Cook)

(pjpink)

(pjpink)

(Patrick)

(Patrick)

(Great Beyond)

(Great Beyond)

(Jack Deem)

(Jack Deem)

(Adam Fagen)

(Adam Fagen)

(Gilbert Mercier)

(Gilbert Mercier)

(Jason)

(Jason)

(andy briggs)

(andy briggs)

Want to see your pictures on our site? Our Flickr pool is the place where Consumerist readers upload photos for possible use in future Consumerist posts. Just be a registered Flickr user, go here, and click “Join Group?” up on the top right. Choose your best photos, then click “send to group” on the individual images you want to add to the pool.

Our Nightmare Is Over: Betty Crocker Rainbow Chip Frosting Is Back In Stores

Fri, 2015-07-24 00:26

(Betty Crocker)

(Betty Crocker)

If you’re a food company and there’s a Facebook group where more than 16,000 people ask you to bring back a discontinued product, you should probably pay attention. Betty Crocker’s rainbow chip frosting disappeared from stores last year, and we heard from heartbroken and chip-less readers. Now the frosting is back on store shelves, and they have been vindicated.

Rainbow chips vs. rainbow sprinkles might seem like a minor distinction, but the flavor and texture is very different, and the chips version looks much cooler.

(One of the more dignified selfies on Facebook)

(One of the more dignified selfies on Facebook)

“General Mills/Betty Crocker have discontinued Rainbow Chip Frosting and are trying to substitute some Rainbow Sprinkle inferior frosting to consumers,” Kristi wrote to us back in February of 2014, with sprinkle scorn leaking out between her words.

“Even if you don’t bake, I bet if you ask anyone you know –– what is their favorite store bought, canned icing/frosting for cakes? –– the rainbow chip icing would be in the top two,” Beth wrote to us last fall.

Activism from these readers and from many, many other fans of the product finally paid off: it’s back in stores. Technically, its return was announced back in May, but it’s finally appearing in stores. The company even honored the creator of the biggest Change.org petition about the frosting with a do-over of his birthday party because he had to suffer without Rainbow Chip frosting. We are not making any of this up.

In what’s sure to be a fascinating case study for marketing students someday, members are showing their status as frosting-owners and showing their support by…posting selfies where they hold frosting cans, or just pictures of the cans as evidence.

Congratulations, Rainbow Chip fans. Enjoy your colorful treats, and savor your victory.

Bring Back Rainbow Chip Frosting [Facebook]

Discover Shrink Rays Credit Card Benefits

Thu, 2015-07-23 23:21

discover_cardSure, we’ve all heard of the Grocery Shrink Ray, but gradually shrinking consumer products doesn’t just apply to physical items. Warranties can shrink, and the services that you receive as part of an account or a subscription can shrink too. Readers are reporting that their Discover card benefits will shrink as of next week, so we have bad news if you were very attached to Discover’s travel insurance, baggage delay insurance, and roadside assistance.

If you’ve never used any of these benefits, then it won’t make much of a difference in your life. Tipster David is kind of bemused at the e-mail that the company sent out to announce the changes, though.

He points out that there’s a strange disconnect between the message opening of “At Discover, we want you to be happy,” and removing some benefits.

Maybe you have a Discover card, and didn’t even know that you had any of these benefits. If credit card companies advertised them aggressively to current members, you might actually use them. Check the website for your card’s issuing bank: even if you read the included benefits closely when you signed up, they may have changed since then.

Benefits you might have that can solve some common consumer problems are purchase return protection and warranty extension, where the act of buying something with a credit card means that the credit card company extends the manufacturer’s warranty.

Member Benefits [Discover]

Former Corinthian College Students Seek To File $2.5B Claim Against Bankrupt For-Profit Operator

Thu, 2015-07-23 22:54
She did it. You can do it to...

She did it. You can do it to…

Former students of now-defunct for-profit education chain Corinthian Colleges continued their fight to recoup the money they spent on classes at the company’s Heald College, WyoTech or Everest University campuses, filing a $2.5 billion claim against the bankrupt educator.

The claim, which represents expenses, fees and lost wages for about 500,000 students, would cover any individual who attended one of the company’s campuses between 2000 and 2015, the Wall Street Journal reports.

Lawyers estimate that individual losses for the students range between $10,000 and $100,000.

If the bankruptcy court allows the joint claim to move forward, lawyers say it would alleviate concerns that some individuals had not received proper notification about their right to file a claim in the pending bankruptcy case.

According to the WSJ, the deadline for filing a claim was July 20, and at that time just 2,150 students had filed individual claims.

The claim is based on students’ allegations that they were misled by CCI and deceived into paying costly tuition for what equates to be a worthless education. The company has previously denied any wrongdoing.

California-based CCI, once one of the largest for-profit college chains in the country, has been at the center of numerous federal and state investigations and lawsuits and began its downward spiral last summer after agreeing to sell or close a majority of its campuses in a deal with the Department of Education.

The company completed the sale of some 56 campuses to Education Credit Management Corporation in early February. In order to close that deal, ECMC agreed to provide $480 million in forgiveness for current and former students who took out CCI’s high-cost private student loans.

Since that time, CCI has faced several other issues including being delisted from Nasdaq and notice from the California Student Aid Commission that it would halt grants to CCI students. Both of those moves came after the company failed to submit required financial statements to both the Securities and Exchange Commission and the student aid commission.

The company’s downward spiral concluded in April when it announced it would close its remaining campuses. The next month the company filed for bankruptcy, leaving hundreds of thousands of student holding hundreds of thousands of dollars in worthless student loan debt.

Former Corinthian Students Seek $2.5 Billion Bankruptcy Claim [The Wall Street Journal]

Carnival Must Upgrade Ships, Pay $350K After Disability Violations

Thu, 2015-07-23 21:57
(Adam Fagen)

(Adam Fagen)

Ships operated by the world’s largest cruise provider are about to become more easily accessible for passengers with disabilities, as Carnival Corp. and the Department of Justice reached an agreement to resolve an investigation into complaints that the cruise line failed to adequately provide accommodations for those with disabilities. 

The Dept. of Justice announced today that Carnival would increase accessibility access for people with disabilities on 62 of its ships, as well as provide $350,000 in damages to individuals harmed by the company’s past discrimination.

Under the settlement, Carnival must survey 42 of its existing ships, plus another seven under-construction vessels, to ensure they comply with the Americans with Disabilities Act (ADA). The company must guarantee that 3% of the ship’s cabins are accessible according to three levels: fully accessible cabins, fully accessible cabins with a single side approach to the bed, and ambulatory accessible cabins.

Thirteen Carnival ships are not immediately impacted by the agreement, but they could each be subject to remediation if they are still servicing U.S. ports in four years.

As part of the settlement, Carnival is required to revamp its reservation systems to make it easier for people with disabilities to reserve accessible cabins and suites with specific amenities.

The company must also provide specific ADA training to employees and managers and pay a $55,000 civil penalty to the government.

According to the Dept. of Justice, the settlement is the result of an investigation of complaints filed against Carnival that included allegations that the company failed to properly provide and reserve accessible cabins for individuals with mobility disabilities; reasonably modify policies, practices and procedures to accommodate individuals with disabilities; afford individuals with disabilities the same opportunities to participate in programs and services, including embarkation and disembarkation; and provide effective communication during muster and emergency drills.

Justice Department Reaches Agreement with Carnival Corp. Over ADA Violations by Carnival Cruise Line, Holland America Line and Princess Cruises [Dept. of Justice]

Uber Driver Claims Dog Urinated In Car, Sends Pictures Of Different Car

Thu, 2015-07-23 21:28

(CBS Chicago)

(CBS Chicago)

It’s not news that someone did something inappropriate in a hired car: that, unfortunately, has been happening for as long as taxis have existed. No, but one woman in Chicago disputed Uber’s claim that her dog relieved himself on the floor of an UberX vehicle and that she owed $200.

UberX, as you may or may not recall, is the company’s lower-cost service that depends on ordinary drivers with standard non-commercial licenses and newer passenger cars.

If you don’t really care whether it’s a Prius or a limo taking you and your dog to the airport, it’s a good money-saving option. Unless the driver reports your dog to Uber for making a mess, and you’re charged a $200 cleanup fee.

That’s what happened to one woman during her trip to the airport. Maybe 10 hours after her uneventful trip to the airport, she learned that Uber had imposed that charge because of a mess her dog made on the floor. The thing is, her dog had stayed in his travel carrier the whole time, and there was no urine in his carrier.

She couldn’t prove it, though, which would make this a perfect scam if not for one thing…the photos that the driver sent of the mess. (You can click here to view them, if you want to.) The problem was that the passenger remembered the car as a black car with a black leather interior, and that’s what the photo on the right shows. The photo on the left shows a gray seat, though. The dog only rode in one car.

The good news is that Uber has given her a refund…but only after she took her case to a local TV station, which in turn took her case to Uber. The company issued a refund because, they explained, their “protocol wasn’t followed” in this case.

It might seem excessive to take a photo when you get out of a vehicle, but apparently it might be helpful if you’re traveling with a pet.

Did Doggie Do? Or Did Uber Try To Pull A Fast One? [CBS Chicago]

Postal Worker Accused Of Delivering 22,000 Pieces Of Mail Straight To His Garage

Thu, 2015-07-23 21:25

(stirwise)

(stirwise)

Tempting though it may be for a postal worker to swipe any of the millions of pieces of mail flying around the country, most refrain, and our packages and letters get where they’re supposed to go. But every once in a while, we have the misfortune to hear about a mail carrier gone rogue. Like a Philadelphia postal worker who authorities say squirreled away tens of thousands of pieces of mail.

Officials say a 48-year-old mail carrier didn’t deliver more than 22,000 letters and packages between May 2014 and January of this year, reports CBS Philadelphia.

Instead, authorities say they found all that mail stashed in trash bags in his car and his garage.

The mail in his haul contained about 7,100 first class letters, 200 certified letters, 11,700 standard letters, five treasury checks, hundreds of pieces of political mail and more than 2,500 non-profit letters.

If convicted of obstructing the mail, he could get up to six months in jail and face a fine. He’ll also join a long list of USPS workers with sticky fingers we’ve heard about in the past. Some of them stole for money (even charities aren’t safe), Netflix DVDs or drugs — whether illicit or prescription. Heck, some even stole from children. Others simply got bored. It’s not just mail carriers either — a postal inspector was once in hot water for stealing passports, pills and Playboy magazines from packages.

Philadelphia Postal Worker Charged With Obstruction Of Over 22,000 Pieces Of Mail [CBS Philadelphia]

City Asks For Fiber Network Help, 5 Years After Being Left At Altar By Verizon FiOS

Thu, 2015-07-23 21:17

(Alec Taback)

(Alec Taback)

Back in 2009, it looked liked Alexandria, VA, residents would get a new high-speed Internet option in the form of Verizon FiOS. The city even went through the bureaucratic process of issuing Verizon a franchise. Then the D.C.-area community got dumped at the altar by Big V and has been looking for someone, anyone to step in ever since.

In a request for information [PDF], the acknowledges that its approximately 150,000 residents “have limited options for broadband internet service,” and that Alexandria leadership “regularly receives feedback from our citizens requesting additional options that are not available on the market today.”

Verizon was all set to provide broadband fiber service to Alexandria (the city and company had not yet finished negotiating a pay-TV franchise deal) when, in Feb. 2010, the president of Verizon’s Virginia operations dropped the bomb that the company didn’t need Alexandria anymore.

As the company has repeatedly stated in its explanations for why its network construction has cooled, Verizon’s initial build-out goal for FiOS was to only make the service available to 18 million homes.

And in the company’s breakup letter [PDF] to Alexandria, it explains that “we now have sufficient franchises in Virginia and nationally to reach those goals… As a result, we will not be able to add the City of Alexandria to our existing portfolio, and at this point, I do not know when that will change.”

But, like many a cad who woos someone only to kick them to the curb, Verizon tried to leave Alexandria with a message of “but you’re still pretty and plenty of folks will love you; maybe even me.”

“Verizon and the City have done the work necessary to make Alexandria an attractive place to invest,” concludes the letter, “if and when Verizon decides to expand its FiOS network.”

After a half-decade of hiding in its room and pining for the one that got away, Alexandria is finally back on the fiber singles scene. And unlike the initial FiOS deal, it ideally wants someone to provide both broadband and pay-TV service, which would bring real competition for Comcast.

Alexandria is giving interested providers until Sept. 3 to respond to the request for information.

[via Ars Technica]

Thousands Of Pigs Left Homeless Amid Craze For Tiny Pet Swine

Thu, 2015-07-23 20:14

(maveric2003)

(maveric2003)

Whether it’s kittens, lizards, puppies or cockatoos, humans just love their pets. But often when one species has a spike in popularity, many pets are left without homes once the craze dies down, and folks realize it’s not always easy raising an animal. You know, because animals have a tendency to eat a lot, and grow, things many pig owners weren’t expecting when they bought their pets.

The teacup pig fad isn’t entirely new, points out the Associated Press, having first popped up a few decades ago, only to be revived now and then. The trouble is, breeders and online sellers employ a tricky tactic, telling would-be pet owners that if they feed their new porkers only a certain amount, they won’t get much bigger after they turn one, and will stay small.

Many times that just isn’t true, and the animals demand more and more food, growing larger and larger. If they don’t eat enough, and eat the proper food for, they’ll starve.

One former pet owner found that out the hard way when the mini pig she brought home started raiding her kitchen and digging through the trash. She’d been told by a breeder to only feed it a half-cup of food twice a day. When she took him to the veterinarian, the doctor said her piglet was acting up because he was starving.

She’d been told he would only grow 12 inches tall, but instead, he grew to 20 inches and 180 pounds. Her husband couldn’t handle it anymore she says, telling her, “Either the pig goes or I go.”

The pig ended up at a rescue home, something that’s been happening a lot these days. Shelters are becoming overcrowded, and some sanctuaries have had to put limits on how many pigs they can take.

“There are not enough homes out there anymore. These pigs are in big trouble,” the operator of Lil’ Orphan Hammies pig rescue told the AP.

She’s saved 1,000 pigs since the rescue started 23 years ago, and gets 20 calls a day from people trying to find a new home for their pigs.

It’s definitely not easy out there for a pet porker: Anna Key, vice president of the North American Potbellied Pig Association, estimated that 90% of pigs adopted in the U.S. end up at a rescue or a sanctuary.

Though breeders claim restricted diets can keep pigs tiny because they’re learning to eat less (which sounds awful), rescues say they’re just getting emaciated and losing muscle mass.

“I have never seen a full-grown, healthy, 35-pound pig live to maturity,” the owner of a Pennsylvania farm rescue told the AP.

Pet porkers pack rescues as trendy teacup pigs fatten up [Associated Press]

Former Operator Of FAFSA.com Penalized $5.2M For Illegal Billing

Thu, 2015-07-23 20:08

Here is what FAFSA.com looked like before the URL was handed over to the Dept. of Education.

Here is what FAFSA.com looked like before the URL was handed over to the Dept. of Education.

Five years ago, we told readers looking to fill out the Free Application for Federal Student Aid (FAFSA) to steer clear of FAFSA.com, as it was not the official Dept. of Education site for the FAFSA. Today, federal regulators announced a $5.2 million settlement with the company behind the now-defunct website for illegal billing practices.

According to the complaint [PDF] filed by the Consumer Financial Protection Bureau with a federal court in California, until earlier this month a company called Student Financial Aid Services, Inc., was operating FAFSA.com, and offering FAFSA preparation services online or over the telephone, for a fee.

The site offered three different premium plans, all of which were set up as “negative option” renewal subscription plans. That means that unless the subscriber specifically told the company to halt the subscription, or unless the company decided to end the recurring charges, the user’s account would be charged each year for FAFSA prep help even if no help was requested.

The problem with the FAFSA.com model wasn’t necessarily the automatic renewals, but the deceptive ways in which the site got users to enroll.

The CFPB alleges that users were told these premium plans were available at “no additional cost,” when in fact there were annual fees of $67 to $85, which were charged automatically to the consumer’s card or bank account on file for up to four years.

Additionally, the site failed to clearly explain or disclose the recurring nature of these charges, according to the complaint. The only indication of recurring charges was a statement on the payment page that read, “worry-free annual billing.*”

The asterisk in that sentence referred to a 6,500-word Terms of Use document elsewhere on the site. But the CFPB says that even those who read the fine print would not have been able to discern they were being put into a negative option renewal subscription, as that aspect was not mentioned. Nor were the annual fees that would be charged.

And subsequent post-purchase confirmation e-mails from the site did not indicate that there would be recurring charges for service, whether it was requested or not.

It wasn’t just the website that was misleading, the company’s phone sales operation also glossed over the nature of the recurring charges.

The complaint alleges that SFAS phone reps “did not clearly disclose that the consumer’s credit card or debit card would be charged each year regardless of whether the consumer was still attending school or making use of the Company’s FAFSA preparation service in the following application year.”

Phone reps’ script also misleadingly upsold the premium tier service as an“upgrade … at no additional cost to our Gold status.”

In all, between 2011 and 2013, the CFPB alleges that SFAS processed approximately 206,000 automatic charges against the accounts of consumers who did not file a FAFSA through the company during that application year.

“Student Financial Aid Services, Inc. made millions of dollars at the expense of consumers through its illegal recurring payment scheme,” said CFPB Director Richard Cordray in a statement. “Our enforcement action will put money back in the pockets of consumers who were misled while seeking to access federal student aid.”

Per a consent order [PDF] with the CFPB, the company must pay $5.2 million that will be used to repay those who were charged for unauthorized, recurring service fees.

FAFSA.com no longer sells SFAS services. Instead, it offers visitors a portal to either the Dept. of Education website or a login for existing FAFSA.com customers to access their accounts.

“Students and families applying for federal student aid shouldn’t have any confusion about whether they’re on the official FAFSA website or a commercial website,” said United States Secretary of Education Arne Duncan. “This transfer will help provide clarity for parents and students.”

Lawsuit Accuses Kohl’s Of Advertising ‘False’ Original Prices

Thu, 2015-07-23 20:05

(Daniel Oines)

(Daniel Oines)

Is it fair to consumers when a retailer sells their own private-label products at a “discount” from the prices that they set in the first place? Two Kohl’s shoppers in California say that it isn’t, and they’ve filed a federal class action suit alleging that discount department store Kohl’s does exactly that.

If this sounds familiar, yes, it’s very similar to a lawsuit filed against TJ Maxx that we shared yesterday, where the closeout retailer is accused of making up the prices on “Compare at” tags on its merchandise.

The two lead plaintiffs claim that the real problem is with the store’s own brands, which include Sonoma, Apt. 9, Croft & Barrow, Daisy Fuentes, Elle, Mudd, Jennifer Lopez, and Simply Vera. Since Kohl’s owns these brands, the “original price” that they set on any item is arbitrary.

Yet shoppers love discount games, so all a retailer has to do is start us out with the idea that an item is “worth” more than they want to charge for it. If they want to sell a dress for about $24, they could mark the “original” price as $40 with a 40% discount. Easy!

The lead plaintiffs say that’s exactly what is happening every day at Kohl’s. (PDF download) “As a result,” their lawyers write in their initial complaint, “Plaintiffs and members of the proposed Class… received items of lesser value and quality than they expected and Kohl’s unlawfully, inequitable, and otherwise improperly was thereby unjustly enriched and benefited.” In other words, that $24 dress was never worth $40 to anyone.

It’s one thing when an off-price retailer sells clothes from other brands that you could theoretically find in a department store, even if the items bearing fancy brand names that you find in stores like TJ Maxx and Marshalls or in brand outlets are actually produced specifically for the off-price or outlet market.

While Kohl’s does business in the same way nationwide, this class action only applies to California, alleging violations of that state’s false advertising, and unfair competition laws.

The plaintiffs ask that Kohl’s stop tagging items with what they call “false, untrue, and misleading ‘regular’ or ‘original’ prices,” as well as restitution for items that they have bought based on those “false” original prices.

Original Complaint [PDF]

Cheaper, More Competitive Broadband: Not Gonna Happen Anytime Soon, Analyst Tells Congress

Thu, 2015-07-23 19:45

(Tom Richardson)

(Tom Richardson)

A committee in Congress yesterday held a hearing on promoting broadband infrastructure investment. That is, getting more wires put in the ground so more people can get online faster and more reliably. That’s a laudable goal that we here at Consumerist tend to cheer on. But one theme became clear from the testimonies of the assembled analysts, industry members, and local public companies who spoke: real improvement is going to be a long, ugly series of fights… and consumers are going to keep paying a lot more while it happens.

There are a lot of different problems and policy questions rolled up under the umbrella of “broadband infrastructure investment.” Ultimately, there are two main separate, but connected, kinds of projects we’re talking about.

The first pressing problem has to do with reaching all of the underserved or entirely unserved areas of the country — about 55 million people, or just around 1/6 of the population. The FCC has a mandate from Congress to bring broadband coverage to as many people as possible, and so government broadband pushes often rightly focus on the parts of the country that are still largely offline, or crawling along on the best dial-up speeds 1995 could offer.

The other problem is one of adding more competitors to areas that are already served. Because competition in broadband just plain sucks, and the FCC also has a mandate to protect and promote competition in communications where they can. Millions upon millions of us live in areas where only one high-speed provider operates, despite deregulation in recent decades that promised to open up a free market where competition would flourish. But that just keeps not happening, because the barriers to entry are just too high.

And so your bills are going to go up for a well-worn and predictable reason: because they can.

That was the message from industry analyst Craig Moffett.

Moffett started his testimony by, in his own words, pointing out the obvious: infrastructure deployment is really expensive, and companies are only going to do it if they expect a healthy return on the wad of cash they spend. He continued that the large, incumbent, publicly traded cable companies — Comcast, TWC, Charter, and Cablevision — all make healthy returns on their broadband systems, now, because much of the outlay was done in earlier years.

But AT&T and Verizon aren’t making a whole lot of money on upgraded networks. And that’s why Verizon has pretty much called a halt to FiOS expansion, even while it kills off its copper-wire phone and DSL networks as quickly as it can.

In short, Moffett said, “the returns to be had from overbuilding — that is, being the second or third broadband provider in a given market — are generally poor.” And if a business isn’t going to make money doing something, they won’t do that thing.

“Stated simply,” Moffett concluded, “it means that market forces are unlikely to yield a competitive broadband market.”

And not only are we all stuck in an uncompetitive market, but our broadband providers are also our TV providers, in many cases… and we’re buying less TV. Money they can’t make from us on one side, they will have to make up on the other.

“This may sound nefarious,” said Moffett, “but it’s not intended to be so. It’s simply an observation that cable operators have historically benefitted from the fact that their infrastructure can support two separate businesses … Absent reforms to restrain the runaway growh in programming costs, video will become unprofitable and broadband will be left to carry the entire burden of incremental deployment.”

All else being equal, he added, that either means that either new broadband builds will become less frequent and stop happening, or broadband prices will jump.

Or we could see both.

Speaking later in the proceeding, Rep. Anna Eshoo of California called Moffett’s appraisal of the situation “highly pessimistic,” adding that it was “depressing” to hear his descriptions of the telecom marketplace. And yet, it’s the marketplace we all have to live in at the moment — and Moffett’s analysis seems spot-on.

Take Comcast, for example, which released their most recent quarterly earnings report just this morning. The headline news was that their broadband subscribers officially outnumber their TV subscribers. They also demonstrated that their revenue from high-speed internet has increased by over 10% as compared to this time last year.

But here’s the key number: their “total revenue per customer relationship” has increased 4.5%. That means that Comcast’s hand-over-fist money-making machine isn’t growing by reaching new households (although it does routinely pick up some of those, too); it’s growing by making more off of every existing customer. In short, we’re all paying more.

Breaking that monopoly, of course, takes exactly the kind of infrastructure investment the hearing was convened to discuss. Some of the new competition comes from corporate expansion — AT&T and CenturyLink promising to unveil new fiber networks, or Google making its slow roll across the country. But much of that comes from local public entities starting their own municipal cable and fiber networks.

Businesses in search of maximum profit not only don’t want to go rural, but also really hate municipal networks. And yet cities just keep starting and expanding them. And despite incumbent businesses arguing against it, the FCC recently voted to allow two cities to preempt industry-funded state laws and expand their own municipal networks. (That legal fight is still ongoing.)

In the end, businesses and communities do not always share goals, as Deb Socia of Next Century Cities, an organization of communities that have or plan to launch municipal networks, summed up.

“When you think about profit … I think the ways that our cities are looking at ‘what is a profit’ are a little bit different than the ways that a company might look at what a profit is. Right?” Socia said.

She then listed off a set of civic goals that communities routinely want to meet and enhance, including economic development, transportation, and education before asking: “What is that worth? How do we ensure that our tribal lands and our rural communities can benefit in the same ways that our other communities are able to?”

You can watch the full video of the hearing below.

Costco Cuts Back On Chilean Salmon In Favor Of Antibiotic-Free Fish

Thu, 2015-07-23 19:29

(Renee Rendler-Kaplan)

(Renee Rendler-Kaplan)

Amid concerns of antibiotics overuse contributing to the development of drug-resistant superbugs, American consumers are increasingly demanding antibiotic-free meat and fish. That’s bad news for Chilean salmon farmers who are facing a bacterial outbreak and treating their fish with record levels of antibiotics — and losing the business of Costco and others.

Chile is the world’s second-largest producer of salmon, pumping out 895,000 metric tons of the fish in 2014. At the same time, Reuters reports that salmon farmers in the South American nation used 1.2 million pounds of antibiotics (up 13% from the previous year) in an effort to fight off the Piscirickettsiosis (or SRS) bacteria, which causes lesions, hemorrhaging, swollen kidneys and spleens, and ultimately death in infected fish.

While the farmers insist that the fish treated with the antibiotics are safe, U.S. retailers — especially Costco — are moving away from Chilean salmon.

Costco purchases some 600,000 pounds of salmon each week to fill its warehouse stores around the country, and until recently 90% of that came from Chile.

But in recent months, the company has moved to cut that by more than half to 40%. The majority (60%) of Costco’s salmon will be coming toward Norway, which produces more salmon (1.3 million metric tons in 2013) and uses virtually no antibiotics (2,142 lbs. total in 2013).

And Costco is just the latest to look for alternatives to Chile. Whole Foods, and Trader Joe’s have already phased out antibiotic-treated Chilean salmon.

“The whole industry is starting to shift,” explains the Costco exec who oversees fresh foods to Reuters. “If I was to ask you your biggest concern on produce, you might say pesticides. When we ask people in protein, generally it’s going to be hormones or antibiotics.”

The situation in Chile is slightly different from the usual debate about antibiotics in farm animals. In most cases here in the U.S., cows, pigs, and chickens are provided continual, low-dose amounts of antibiotics, primarily for growth promotion.

Following recent guidance to drug-makers from the Food and Drug Administration, farmers now claim they use the drugs for “disease prevention,” even though this prophylactic, sub-therapeutic approach to antibiotics is exactly the kind of practice that physicians and scientists say engenders the development of drug-resistant pathogens.

But in Chile, the farmers claim that the antibiotics to prevent SRS infection are medically necessary.

“This is only something given to sick fish so they don’t die. It’s not something preventive,” the CEO of salmon producer Camanchacha tells Reuters.

And much like farm animals are weaned off antibiotics to minimize the chance of drug residues in meat products, the Chilean salmon go through a detox period before being harvested. And the FDA says its inspections since Oct. 2014 of these fish have not turned up any unapproved drug residues.

However, the issues of drug residues is different from the conversation about drug-resistant pathogens. Even though the fish may be cleansed of the antibiotics by the time they hit store shelves, the constant use of the drugs in salmon farms still can result — and has resulted — in the development of resistant bacteria.

In 2014, a Chilean government report noted antibiotic-resistant strains of SRS turning up in the country’s salmon farms. And they will likely continue to pop up so long as farmers keep using the same antibiotics.

Farmers say that without a vaccine to treat SRS, they have no choice but to continue with the antibiotics treatments.

Addicted to antibiotics, Chile’s salmon flops at Costco, grocers [Reuters]

Strangers Pitch In To Keep Woman’s Car From Being Towed While She’s In The ER With Infant Son

Thu, 2015-07-23 19:07

(TLFagan)

(TLFagan)

You know the feeling — you’ve only got a little time left on the parking meter but you’re stuck somewhere, forcing you to face either a parking ticket, or even worse, having your car towed. One woman who was unable to feed the meter after spending hours in the ER with her infant son reached out to her fellow mothers, and was rewarded with an outpouring of generosity from total strangers.

A Toronto woman had to rush her six-week-old son to the hospital recently, and didn’t think she’d be too long, so she put enough money in the parking meter to cover her car for four hours, The Canadian Press reports.

But when she had to wait three hours to even see a doctor, she realized the meter would soon expire. So she reached out to a Facebook group for local mothers, asking whether anyone knew if her car would be ticketed or towed.

Strangers answered her, and also showered her post with offers to stop by and fill up the parking meter for her.

“I’m not far. I can go put change in it for you in about an hour on my way back home if you are still there,” one wrote.

“I live not too far from the hospital. Will head over now and top up the meter for you!” another added.

Nine hours later, she picked up her car to find that there were still five hours left on the meter, and that her Facebook feed had exploded with messages from people she didn’t know, wishing her and her son well.

“I was completely overwhelmed. I was completely grateful,” she said. “It made a very tough and stressful situation a lot easier for me. It made me able to focus on my son’s needs rather than having to worry about my car being towed.”

She adds that hundreds of mothers have been asking for updates on her son’s condition, as well as offering parking passes for her to use on her next trip to the hospital. She says now she’s inspired to return the favor, and will be keeping in touch with those who reached out to her.

That feeling you’re having? It’s the warm fuzzies. Feels nice, doesn’t it?

Strangers stop woman’s car from being towed during infant son’s hospital visit [The Canadian Press]

Comcast’s Broadband Customers Officially Outnumber Its Cable Subscribers

Thu, 2015-07-23 18:10

comcastq2The writing was on the wall last quarter when Comcast’s dropping pay-TV subscriber base was only 6,000 more than its growing pool of broadband customers, but with today’s release of the latest subscriber numbers it’s official: Comcast now has fewer cable customers than it does Internet subscribers.

In fact, the difference is now quite substantial, with Comcast gaining 180,000 broadband customers and losing 69,000 pay-TV subscribers. That leaves the company with 22.31 million pay-TV subscribers, more than 200,000 short of the 22.55 million broadband users.

Interestingly, the company recently saw growth in subscribers signing up for bundles of at multiple services, with gains of 46,000 customers signing up for two products (i.e., cable and phone, or cable and Internet, etc.) and 42,000 new additions to customers getting all three Comcast products.

The company recently made a big play to retain these Triple Play customers in the Northeast, offering to bump up their Internet speeds at no extra cost. Customers without the three services have to pay more for the faster broadband.

Yellowstone Park Officials Reminding Visitors Not To Get Too Close To Animals Just To Get A Good Selfie

Thu, 2015-07-23 18:05

(Ben Schelling)

(Ben Schelling)

That question your parents asked you at least once in your life is coming into play now at Yellowstone National Park: officials are warning visitors not to get too close to wild animals to get a good selfie, even if everyone else is doing it.

The thing about wild bison is, they’re wild, and as such, very unpredictable, park officials are now reminding visitors. The fifth person to be injured this year in the park after a confrontation with wild animals was trying to take a selfie with one of the huge beasts near a trail on Tuesday, reports CNN.

She and her daughter turned their backs on the bison, which was about six yards away, in order to grab a photo with it, the National Park Service said.

“They heard the bison’s footsteps moving toward them and started to run, but the bison caught the mother on the right side, lifted her up and tossed her with its head,” the park service said in a statement Wednesday. The woman had minor injuries.

Despite the fact that they’d read warnings about getting too close to wild animals, the family saw other people close to the bison so they decided that meant it was safe, a ranger said.

“The family said they read the warnings in both the park literature and the signage, but saw other people close to the bison, so they thought it would be OK,” the ranger said. “People need to recognize that Yellowstone wildlife is wild, even though they seem docile. This woman was lucky that her injuries were not more severe.”

Park authorities tell visitors to keep at least 25 yards between themselves and large animals like bison, and a full 100 yards away from bears and wolves.

“Bison can sprint three times faster than humans can run and are unpredictable and dangerous,” park officials warn.

Bison attacks woman who was trying to take selfie with it in Yellowstone Park [CNN]

New York Lottery Seeks Missing Buyer Of $7 Million Ticket

Thu, 2015-07-23 17:54

This is not an especially helpful wanted poster, but it is helping publicize the situation

This is not an especially helpful wanted poster, but it is helping publicize the situation

A year ago, someone walked into a bodega (or, as we say in the rest of the country, a “convenience store”) in Canarsie, Brooklyn, and bought a lottery ticket. Perhaps he or she lost the ticket, or missed checking the winning numbers, because the buyer won $7 million, yet has not come forward. They need to do so before tomorrow.

Lottery prizes must be claimed within one year, and the lottery has no clues to go on in this case. That’s why they’ve made the hilariously vague but attention-getting poster that you see above. Officials know that the winner was human, though they probably shouldn’t rule out three cats standing on each other’s shoulders and wearing a trenchcoat.

While the poster shows a person wearing a hat, they don’t even know that much: unlike in other cases where authorities have searched for missing lottery winners, the store doesn’t have surveillance camera footage still around from a year ago so they could pull a photo of the winner from it.

If you do happen to be the person who bought a lottery ticket for the July 24, 2014 drawing at the Milky Way Deli in Canarsie, you should call the lottery at ­(518) 388-3370.

Lottery uses stick-figure sketch in effort to find $7M winner [New York Post]

Sen. Al Franken Calls For Federal Investigation Into Apple Music

Thu, 2015-07-23 17:45

(josepqr)

In response to concerns arising from the recent launch of Apple Music, U.S. Senator Al Franken called on both the Department of Justice and the Federal Trade Commission to investigate the possibility that the tech giant may be creating an anticompetitive environment in the streaming music market.

In a letter [PDF] sent yesterday to U.S. Attorney General Loretta Lynch and FTC Chair Edith Ramirez, the senator from Minnesota notes that Apple’s restrictive agreements with app developers — especially those that compete directly with Apple Music — may “have the potential to limit choices and raise prices for consumers.”

Franken points out that Apple currently charges a non-negotiable 30% fee on revenues from in-app purchases of subscription services made through apps operating on Apple devices. This extra cost for these services can result in higher prices for consumers, but Franken says that companies are restricted from explaining this to consumers or from pointing out that they can get the service for less elsewhere.

For example, Spotify generally charges customers a rate of $9.99/month when they sign up for the service through its own website. But customers who choose to sign up through Apple are charged $12.99/ month.

“These types of restrictions seem to offer no competitive benefit and may actually undermine the competitive process,” writes the senator, “to the detriment of consumers, who may end up paying substantially more than the current market price point.”

The National Journal reports that Spotify has begun to push back against Apple, creating an advertising campaign that urges customers to sign up for the service via their website and save the three dollars.

Franken’s call for an investigation may be a little late, as earlier this week The Verge reported that the FTC had launched an investigation into Apple’s dealings with rival streaming services.

Citing sources close to the matter, the publication reported that investigators had already issued subpoenas to other streaming services regarding their dealing with Apple’s App Store.

Even before Apple Music launched last month, the service and Apple’s dealings with rival services had come under intense scrutiny.

Back in May, multiple sources said that the Department of Justice was keeping tabs on Apple while it reportedly tried to narrow the playing field ahead of Apple Music’s release. The sources said the scrutiny was initiated by Apple’s alleged push for major music labels to put the kibosh on free music offered by Spotify and other similar streaming services.

Then, just before the service launched in June, the attorneys general for both New York and Connecticut announced they had made inquiries about Apple’s negotiations with record labels to see if the company may have conspired to harm the business of competitors like Pandora or Spotify.

Of course, any investigation into anticompetitive practices wouldn’t be a first for Apple.

When Apple moved into the e-book market several years ago, the company colluded with the country’s largest book publishers to fix prices and gain a foothold in the market.

Federal prosecutors showed that Apple convinced book publishers to change their pricing models so that the publishers set the retail price rather than the sellers. This prevented any one seller from offering deep discounts to compete with Apple. It also resulted in consumers paying more for e-books on Amazon than they were for printed and bound copies of the same titles.

The publishers in that case all settled without admitting any wrongdoing, but Apple was ultimately found liable at trial.

Al Franken Urges Federal Probe of Apple Music [National Journal]

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