Remember when we reported that T-Mobile was reportedly fined by the FTC for ‘Cramming’? Cramming is/was an industry practice that revolves around trying to charge customers for services that either don’t exist or services that they simply never authorized. They sneakily will put these charges in people’s bills and most people never notice the increased charges or understand what they’re for.

Well, today, AT&T has settled with the FTC and FCC for doing the exact same thing, to the tune of $105 million, $80 million of which will have to go back to consumers in the forms of refunds. $20 million will be paid out to 50 states and $5 million will be paid to the FCC in the form of fines for violating FCC rules. The FTC will be handling the refunds for AT&T customers that were ‘crammed’ and when you consider that AT&T has 100 million customers, $80 million doesn’t actually sound like that much anymore. In fact, if you were to assume they’ve crammed on average every customer at least once, that’s less than $1 per customer in terms of refund and we all know that AT&T doesn’t cram people for a single dollar.

If you were a customer of AT&T any time between now and January 1st, 2009 (which probably was negotiated by AT&T as a start date) then you might be eligible for a refund from AT&T’s fund for this cramming behavior. AT&T claims that they ended such behavior in December of 2013, very likely after the FTC or FCC sent them a very nice letter informing them that they’d been found out and that consumers had complained. Cramming is a dirty practice and should have been punished more heavily than a $105 million fine. We still don’t know the outcome of T-Mobile’s cramming case, but John Legere lashed out at the FCC and FTC and claimed that these were the big carriers going after T-Mobile, which kind of makes his whole argument invalid since AT&T is one of the two ‘big carriers’.

To claim your refund, just head over to the FTC AT&T Refund page and file your claim by May 1st, 2015.

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A federal court has, upon request by the Federal Trade Commission (FTC), ordered the shutdown of Butterfly Labs, a company that specializes in building hardware for Bitcoin mining. According to a statement by the FTC, it has received complaints against Butterfly Labs and its officers relating to how the computer-maker failed to deliver its paid-for products on time, thereby resulting in these devices being useless due to the fast-changing nature of Bitcoin.

“The FTC’s complaint against the company and its corporate officers alleges that Butterfly Labs charged consumers thousands of dollars for its Bitcoin computers, but then failed to provide the computers until they were practically useless, or in many cases, did not provide the computers at all,” says the FTC statement.

The Monarch, Butterfly Labs’ 700 GH/s Bitcoin mining card

Useless Bitcoin mining equipment

As a cryptocurrency, Bitcoin does not go through a centralized exchange, but rather, transactions go through a public blockchain, which constitutes encryption and authentication. The virtual currency can either be exchanged as online cash, earned by selling goods, or mined by solving increasingly complex algorithmic formulas. It is through the latter in which companies gain to earn Bitcoins through mining. However, given the computational power required, specialized rigs are needed to mine coins, and the required computing power increases as more Bitcoins are mined.

Based on the complaint, Butterfly Labs started marketing its Bitcoin-mining BitForce computers as early as June 2012, with prices ranging from $149 to $28,899, depending on processing power. In August 2013, the company launched a new product line called Monarch, which retailed from $2,499 to $4,680. However, the complaint has alleged that Butterfly Labs “had delivered few, if any, Monarch computers as of August 2014.”

The nature of Bitcoin mining is that the algorithm becomes more and more difficult with time. With this, delayed delivery of mining rigs has resulted in lost opportunities and potential profits. The FTC cites one of its complainants as comparing Butterfly Labs machines that were delivered late to a being as effective as a “room heater”.

FTC’s war against Bitcoin?

In a September 2013 interview with cryptocurrency-focused publication CoinDesk, Butterfly Labs COO Josh Zerlan cited delays from upstream suppliers as the main cause of production delays and difficulties. Zerlan even went as far as to blame detractors who may actually have vested interest in their competitors canceling orders, because they would profit from the reduced competition from other Bitcoin miners themselves. “That’s really the crux of it: the less people mining, the more money you make as a miner,” he said.

In a statement responding to the court ruling, Butterfly Labs has expressed disappointment in the “heavy-handed actions of the [FTC],” and said the judgment had been rushed. The company is cooperating with its court-appointed receiver, and says it has already shipped $33 million worth of products to consumers and voluntarily refunded $17 million to others.

For the company, the court-ordered closure is considered an act by the FTC against Bitcoin as a whole, in reference to how the commission is seeking to regulate Bitcoin and other cryptocurrencies. “It appears the FTC has decided to go to war on bitcoin overall and is starting with Butterfly Labs.”

Butterfly Labs is not alone in its difficulties, however. Bliss Devices founder Paul Chen writes at Money  & Tech how the mining community has raised concerns on the viability of mining Bitcoin and other cryptocurrencies, especially given the exponentially-increasing difficulty associated with it. “Not only does it now require more upfront investment in hardware and infrastructure to compete, but mining operators also need an edge in terms of minimizing operational costs such as cheap power, low-cost datacenter leases, or natural cooling solutions to remain competitive.”

Case to be decided in court

According to figures cited CoinDesk, customers in 24 countries have lodged 283 complaints against Kansas-based Butterfly Labs since 2012, with 73% of these complainants coming from the US. The FTC says that at least 1,000 customers had been affected by the “bogus Bitcoin mining operation,” which has resulted in losses ranging from $20 to $50 million. This is the first ever Bitcoin-related case that the FTC has pursued, according to Helen Wong, an FTC attorney.

“We often see that when a new and little-understood opportunity like Bitcoin presents itself, scammers will find ways to capitalize on the public’s excitement and interest,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.

The order requires Butterfly Labs to “immediately stop making misrepresentations about their products and services.” It also places a freeze on the company’s assets. According to the FTC, the commission “files a complaint when it has ‘reason to believe’ that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest.” The actual case will be decided in court.

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Since most people’s contracts are usually 2 years long, you don’t usually see any significant movements of subscribers from one carrier to another. They happen slowly and quarterly, after all, it would take at least 8 quarters for a company to theoretically lose all of their subscribers if every single person wanted to leave. So, it comes as little surprise that Sprint still holds the numbers 3 spot in terms of subscribers when compared to T-Mobile. Based on T-Mobile’s last earnings call, they ended the first quarter of this year up 2.4 million with nearly 50 million customers, coming ever closer to Sprint’s 54 million. And if you take into consideration T-Mobile’s JUMP program and the millions of customers that are involved in that, it seems logical that T-Mobile would be buying more phones from manufacturers. Also, keep in mind that T-Mobile also offers a no-contract plan option and actually encourages a lot of users to buy their owns outright and just pay the base price of T-Mobile’s service.

According to Reuters, the fact that they had added more subscribers than any other carrier in the US significantly added to this overtaking of Sprint. T-Mobile bought 6 million smartphones in the first quarter of this year while Sprint only bought 5 million, according to Neil Shah of Counterpoint Technology Market Research. There wasn’t much other useful information from Reuters or Neil Shah in the article, although one can surmise that if a carrier is ordering more phones than their larger competitor that they’re clearly doing more business ans signing up more customers for plans. And now that T-Mobile is selling more phones than Sprint, its merely a matter of time until they surpass Sprint in subscribers as well. However, that might change if the T-Mobile-Sprint merger/acquisition is approved by the DoJ and FTC.

This is also possibly because T-Mobile is also a leader in technology, adopting certain technologies like VoLTE ahead of their competitors, especially Sprint who has yet to deploy enough of an LTE network to even consider the idea of VoLTE. T-Mobile is also vastly faster and cheaper than Sprint in a lot of scenarios so, I have a feeling that a lot of T-Mobile’s customers are AT&T and Sprint customers, which could be why Softbank, Sprint’s parent, want to buy them.

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So, you know the whole premise that Snapchat is based upon? The fact that you can set a timer for an image and once that image’s time disappears, so does the image? And that somehow is supposed to prevent people from potentially saving those embarrassing or racy photos? Well, that was all a big fat lie. In a settlement that Snapchat has reached with the Federal Trade Commission (FTC) they have agreed to a whole host of regulations and oversight of the company’s privacy and security policies since they had misled consumers about both. In fact, Snapchat’s security and privacy will be monitored closely for the next 20 years in order to ensure they aren’t breaking any laws or agreements if they do, they will be appropriately fined.

Quoting the New York Times article on the matter, “Under the terms of the settlement, Snapchat will be prohibited from misrepresenting how it maintains the privacy and confidentiality of user information. The company will also be required to start a wide-ranging privacy program, a sort of probation, and will be independently monitored for 20 years. Fines could ensue if the company violates the agreement.

In its complaint against Snapchat, the commission said the app’s messages, often called snaps, could be saved in several ways, contrary to what the company has said. Users can save a message by using a third-party app, the agency said, or employ simple workarounds that allow users to take a screen shot of messages without alerting another user.

The complaint also said Snapchat transmitted users’ location information and collected sensitive data like address book contacts, despite its saying that it did not collect such information. The commission said the lax policies did not secure a feature called “Find Friends” that allowed security researchers to compile a database of 4.6 million user names and phone numbers during a recent security breach.”

So, not only has Snapchat misrepresented the privacy and security of users’ images, they’ve also been collecting users address book data and GPS data without their willing or knowing consent. What does this mean for Snapchat? They’re going to have to constantly have to make sure they are in compliance with FTC regulations and will likely have to hire more lawyers than they already have as well as compliance officers in order to stay current. Not to mention all of the bad press about Snapchat basically lying to users and telling them one thing while it really does another. Not to mention collecting vast troves of users’ data without even asking their consent, which may affect user trust of Snapchat. Overall, this is not a good thing for the company but it is a good thing for consumers.

As of right now, no fines have been decided upon, but it is likely that once the FTC receives public comment and they vote once again, they will decide whether or not there will be any fines levied upon Snapchat. However, it was established by the FTC that any violations of these new rules set on Snapchat by the FTC will be charged to the tune of $16,000 per infraction with no limitation on amount of charges or fees.

Lets also not forget that the founder of Snapchat allegedly turned down an offer from Facebook worth $3 billion and now, the valuation of his company is in jeopardy with today’s settlement.

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In an attempt to placate the FCC, DoJ, FTC and basically every government agency on earth against their acquisition of Time Warner Cable, Comcast has announced that they will be divesting 3.9 million subscribers from the potential Comcast-TimeWarnerCable merger. This new announcement is a huge farce on the part of Comcast attempting to make it look like they’re seriously divesting from certain markets and giving subscribers to Charter. When in reality this new deal they are proposing actually muddies the waters further than a straight Comcast-TimeWarner acquisition and lines Comcast up for a quiet re-acquisition of those 3.9 million subscribers as well as “New Charter” which will be a new version of the current Charter Communications that will be eastablished to enable this deal.

Time Warner will divest 1.4 million of their video subscribers to “New Charter” which will 100% own the old Charter and 33% of the “SpinCo” which is going to be a publicly traded company that will take on the 2.5 million video subscribers that Comcast has “divested” from, even though 77% of that “SpinCo” remains to be accounted for by Comcast and how much of that remainder they will own. They also haven’t said how much they will be selling these divested customers to the “New Charter” for nor how much of a stake in SpinCo they will have, which i suspect will be bigger than anyone wants to believe. I suspect that Comcast will take a fairly large share of this new “SpinCo” even though Charter will be contracted to operate it and hold 33% of the shares.

This is all being done by Comcast to reduce their overall subscriber base numbers to levels that make them appear smaller and less monopolistic even though the land line internet services are much more important to us and the future of the company. They are not talking about internet subscribers whatsoever but rather video subscribers, which, if you remove 3.9 million from a unified Comcast-Time Warner merger, would bring the new company down from about 33 million to  28 million, a mere drop in the bucket of around 11%. This is merely a symbolic gesture on the part of Comcast to placate the regulators that say that Comcast and Time Warner Cable need to divest in order to be able to move forward with the acquisition. In my eyes, no divestment is good enough to allow the two companies to merge, especially knowing Comcast’s behavior with competitors like Netflix. And the weirdest part is that their plan to divest of the 3.9 million video subscribers would ultimately create Charter as the second biggest cable operator in the nation after Comcast-Time Warner Cable and they would have a pretty significant hand/stake in that venture’s creation, meaning that they wouldn’t have much trouble gobbling it up if they felt like it.

All of this stinks really badly and I simply don’t see how consumers stand to benefit from this acquisition whatsoever. Sure, it furthers Comcast’s thirst for acquisition, more subscribers and more growth as well as Time Warner Cable’s desire to be bought out by someone bigger so that they can move on from their ‘skimpy’ profits. It also satisfies Charter’s desires to expand as they were once a suitor of Time Warner Cable, prior to Comcast, and now they get 1.4 million of Time Warner Cable’s subscribers AND they also get to manage 2.5 million of Comcast’s ‘SpinCo’ new cable operator entity. So, yes, the companies will be happy, but they will ultimately screw the customers more than anything else and this complicated deal serves no real benefit other than scale to Comcast. Their plans to divest are merely a bone to throw to the regulators so that the regulators can say that Comcast made an effort to be ‘fair’ and balance out the market power across the market even though Comcast + Time Warner Cable would still be more than 4 times bigger after the plan to divest as their next biggest cable competitor.

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