An electrical fire at Time Warner Cable’s headquarters in El Paso, Texas knocked out cable television, Internet, and telephone services for customers across El Paso Tuesday.

Company officials claimed the fire, which did only minor damage, interrupted service for several hours, but some customers reported phone service and on-demand programming interruptions extending into Wednesday.  Although Time Warner claimed the problem affected only “a few” subscribers, KFOX-TV reported the outage affected the entire city of El Paso.

Ironically, although the company’s customer service center was closed Wednesday, the bill payment office remained open for business.

Service has since been restored across the city.

KFOX-TV, El Paso’s local Fox affiliate, has the most in-depth coverage of Time Warner Cable issues in southwest Texas:

Warning – Loud Audio!

Time Warner Cable will only issue credits for service interruptions to those who specifically request them.  Residents of El Paso can call 1-800-222-5355 to request credit.

KTSM-TV also reported that some Internet customers may have also been affected with extended outages, even after cable television service was restored:

El Paso and Time Warner Cable have had an occasionally contentious history with one another, extending back a year ago when service problems plagued area residents.

Repeated media attention, and the involvement of state and local officials became necessary.  But the ability for the state to deal with poorly performing cable companies is limited — Texas is one of the states that issues statewide cable franchises, tying the hands of local officials.  Additionally, very little state regulation of telecommunications services in Texas means customers often have limited recourse to deal with bad service, beyond simply trying to find an alternative provider, if available.

A history of past troubles can be found in several news video reports below the break.

… Continue Reading

In a sorry development, Canada’s telecommunications regulator, the Canadian Radio-television Telecommunications Commission, today issued a rubber stamp approval of Bell’s proposal to impose Usage Based Billing and overlimit fees and penalties for “excessive use.”

The CRTC apparently breezed its way through Bell’s application, deciding it sounded good enough for them, and made only minor adjustments.  The CRTC’s short-sighted consumer protection angle was to demand that before Bell implemented any Internet Overcharging scheme on its wholesale customers (using the Gateway Access Service), namely those who purchase connectivity to provide independent ISP service to Canadians, they must first stick it to their own retail customers.

Like that represented a problem.

The Commission  approves on an interim basis the Bell companies’ proposed two new Gateway Access Service (GAS) speed options and rates. The Commission also approves on an interim basis their proposal to introduce UBB for GAS, effective 90 days from the date of this order.  The Commission further approves on an interim basis their proposal to introduce an excessive usage charge for GAS of $0.75 per GB in excess of 300 GB, effective the date the Bell companies notify the Commission in writing that they apply an excessive usage charge of $1.00 per GB in excess of 300 GB to all their retail customers on UBB plans.

After all, if you are going to overcharge some people for broadband access, why not overcharge them all!

Bell serves both the wholesale needs of independent service providers and retail consumers subscribing to DSL service.  Last year, Bell suddenly began throttling the speeds of their wholesale customers without notification, killing a major marketing benefit independent providers offered potential subscribers – a non-throttled broadband experience.  The remaining independent service providers that compete against Bell and many cable companies in Canada by offering unlimited access now find that marketing angle also rapidly becoming unavailable.  Such actions benefit the larger providers by making independents uncompetitive and force Canadians into all of the classic Internet Overcharging schemes, with no alternatives.

The result has been outrage by Canadians who have discovered, yet again, the CRTC represents the interests of large corporate telecommunications companies and not the common sense needs of ordinary Canadians for affordable, open Internet access.  While the CRTC continues to act like the cable and telephone industry’s BFF, Canada’s former leadership in broadband rankings continues its rapid deterioration, falling further and further behind other industrialized countries, all for the benefit of providers and their profits.

The CRTC remains impotent in promoting effective competition and consumer-friendly policies.  Broadband Reports notes that may be by design. Many staffers at the CRTC have past histories with the providers they are supposed to independently regulate.  They point specifically to vice-chairman Leonard Katz, whose amazing lack of consumer concern may partly result from his more pressing need to consider the interests of his former employers – Rogers Cable (17 years) and Bell (11 years).

Canadians can and must demand an end to the CRTC-Telecom Industry Friendship Festival that seems to be ongoing at their expense.  Contact your member of Parliament and demand some top to bottom changes in regulatory policy that are front and center focused on the needs of Canadian consumers, not on the interests of a handful of big telecom companies.  An investigation into possible conflict of interest is also warranted.  Exactly how many CRTC staffers come to the agency from the companies that are regulated by it, and how many find nice jobs waiting for them at those companies when they leave government service?

Stop the Cap! readers have seen the differences in broadband pricing between Japan and the United States.  The CRTC approval of Bell’s request makes a bad situation even worse across Canada, particularly in areas where there are no alternatives to Bell’s DSL service.

How low can they go?

Chiehyu Li and James Losey at the New America Foundation have completed an excellent comparison between broadband service overcharging schemes in the United States (and the slow speeds and high prices that accompany them), with broadband service in Japan, where download usage caps are unheard of, speeds reaching 1Gbps are priced at under $60 a month, and bandwidth throttling of peer to peer applications is uncommon at best.

Although services offered by Japanese ISPs are more expensive than these “economy plans,” they are not only much faster but offer considerably more flexibility in terms of bandwidth consumption. In Japan, the lowest cap for residential Internet of the companies we researched is 150GB per month for upstream only, implemented by i-revo, a nationwide fiber ISP that provides up to 100Mbps symmetrical access. BB Excite, SoftBank and Internet Initiative Japan (IIJ) also imposed 420GB to 450GB bandwidth per month only on the upload side.

Although pricing is higher for some of the “economy” plans in Japan, customers there have no risk of running into overlimit penalties and fees punitively placed on customers’ bills when they exceed the paltry caps usually found on Internet Overcharging “economy” tiers.  With some charging $2-10 per gigabyte, it’s easy to send bills much higher with very little usage.

The report “demonstrates that bandwidth caps in the U.S. are more restrictive than in Japan. ISPs in Japan only cap upstream traffic, if at all, and few impose network management practices to limit bandwidth consumption. The results of this report should encourage policymakers to investigate market conditions in Japan to determine how and why their networks supports far more per-customer throughput than comparable networks in the U.S. Additionally, regulators and policymakers need to investigate why Japanese high-speed Internet subscribers get faster speeds at lower prices, with fewer limitations than subscribers in the U.S.”

Of course, it’s no mystery why American providers are seeking to impose various overcharging schemes on their customers — they want fatter profits, and will leverage the barely competitive broadband market to get them, especially if they think policymakers won’t respond with the appropriate oversight and regulation, where necessary, to protect consumers from monopoly/duopoly-leveraged pricing.

Even comparing the higher bandwidth caps in the two countries, including the highest priced residential plans, bandwidth caps in the U.S. are drastically lower and more restrictive than those in Japan. Chart 2 shows service options with the highest bandwidth cap in the two countries. U.S. ISPs such as Cox, Charter, Comcast and Cable One cap bandwidth from 20 GB to 250GB per month for combined up and downstream traffic for their higher-priced Internet services. Among these ISPs, Cox has the highest monthly caps, offering 300GB for downstream and 100GB for upstream to Ultimate Package subscribers (50Mbps/5Mbps). Comcast caps bandwidth at 250GB a month, combined upstream and downstream, for all tiered Internet services. Continuing the U.S. trend towards more restrictive Internet service, AT&T has proposed bandwidth caps of 20-150GB a month. In addition, some of these ISPs have imposed network management on users’ Internet traffic.

The United States has one major multiple cable system owner that has sworn off these schemes – Cablevision.  A few competitors, including Grande Communications, found in Texas, also advertise they will not impose limits or schemes on their customers.  Frontier Communications has promised its customers it will not enforce any limits on its broadband customers until further notice either (although we’d prefer they eliminate the 5GB Acceptable Use language from their terms and conditions).  Verizon is perhaps the most important non-capper, at least for now.  It has no current plans to implement Internet Overcharging schemes on its customers.

Once again, the United States is heading backwards in broadband pricing, speed, and freedom for customers to use their service as they see fit.  Instead, providers with Internet Overcharging schemes seek to limit broadband usage to extract maximum potential profits, and protect their video business from online competition.  The fundamental question for the future will be, who controls America’s Internet?

Phillip "The Only One Not Being Paid" Dampier

Tim Karr from Free Press dropped me a note alerting me that the Heartland Institute had responded to the comments from both Karl Bode at Broadband Reports and myself in regards to their transparent anti-consumer Net Neutrality is Bad position the telecommunications industry and their fellow astroturfing friends have been spouting as of late.

Free Press occasionally reprints some of our content on the Save the Internet! blog, which I always appreciate.  But James Lakely wanted to take issue with several points, so the cross-blog debate begins.  Free Press has already responded, but now it’s my turn.  The quoted sections come from Lakely’s piece:

The general theme of the responses is: Government regulation always good, wise and beneficial; the market responding to consumers’ needs always nefarious, short-sighted and harmful. It goes without saying that we here at The Heartland Institute disagree. And here are my rebuttals to the rebuttals.

My rebuttal to the rebuttals to the rebuttals begins with calling out this sweeping generalization which actually doesn’t represent my view at all.  In fact, it’s wildly against what I believe personally.

Government regulation is not always good.  In fact, I’d like to see as little government regulation as possible.  I’d prefer robust, healthy competition on a level playing field, because as a consumer (and this site is 100% consumer, with absolutely zero industry/special interest money) I and my friends stand to benefit from that.  But unlike my “free market is always right” friends who cannot say they are 100% free of industry/special interest money, I also recognize that in the absence of a healthy, free market, the abuses are sure to follow without oversight.  And they have.

Let’s be honest.  The broadband industry in the United States is a duopoly for most Americans.  One telephone company and one cable company.  Wi-Fi and wireless broadband service remains either unavailable, uncompetitive from a pricing standpoint, or heavily limited by usage caps.

Since the late 1990s, the choice for broadband has been simple – DSL from the phone company or a cable modem from the cable company.  Pricing competition for most comes only for new customers in the form of promotional sign-up offers that quickly expire.

The marketplace has been stable for a decade with the business model of DSL competing mildly on price, a recognition of its often slower speed service, and cable bashing the phone company over the head for not offering “blazing fast speeds” and charges slightly more to deliver them.

Customers have made choices accordingly.  When a customer doesn’t care about a speed race, gets a competitive bundle offer from the phone company throwing in something like a free netbook, and still has phone service from their local phone company, DSL can make sense for them.  For those who want the fastest speeds, already dumped the phone company for a cable “digital phone” product, and got an attractively priced bundle offer from the local cable company, they’re likely using a cable modem.  For a lot of Americans in rural areas it’s “take whatever you can get.”

That marketplace worked well for a decade for more populated areas with the loudest clamoring for any change coming from underserved rural areas just looking for any broadband service.

Then things began to change.  In November 2005, SBC-AT&T decided it wanted to change the model.  Instead of providing connectivity for customers, they decided there was more money to be made by doing away with the founding model of the Internet — providers treating all traffic equally — and pondered forcing content providers to pay for transporting that traffic across their “pipes.”  Companies with no business relationship with AT&T were told they could no longer use “AT&T’s pipes for free.”  Now, under AT&T’s new model, if they wanted assurances of fast speed to their customers, those independent providers would have to pony up.

That sounded like a grand idea to Wall Street who trumpeted the potential earnings enhancements a new revenue stream would provide, and several other service providers with dollar signs in their eyes yelled “me too, me too!”

Predictably, some of the loudest outrage about this came from consumers — the ISP’s own customers.  They had the apparently-mistaken notion that they were paying for broadband service to build and maintain a network to serve their needs for fast, reliable, broadband service for any site they visited.  Apparently not.  Consumers were often unmoved by a lobbying effort that suggested other big corporations were raking in profits on the backs of service providers “forced” to deliver their traffic.  Good old common sense speaks volumes.  Consumers don’t want their Internet service throttled, or see the content they want to access fiddled with just to fatten industry profits.  The industry didn’t listen to consumers and are back yet again fighting Net Neutrality legislation.

The reason for the fight against Net Neutrality is simple: companies answer first and foremost to their shareholders, the supporting culture of Wall Street analysts and the media that trumpets their views.  Short term results matter more than long term strategies.  Monetizing broadband traffic, a growth industry to be sure, was a golden opportunity, even if the companies originating the traffic already pay hosting companies to deliver it.

From there, the story is always the same.  In a healthy, competitive market, abusive practices are checked when customers flee a provider that stops listening to them.  In a duopoly or limited competitive market, with reduced risk of customer defection, and in the absence of any other force to check unrestrained behavior, customer opinion becomes a low second in importance.  It is the government that provides the necessary oversight and protection mechanism from market abuse running wild.  Oversight does not limit competition.  It can actually encourage it.

The players have assembled:

• Consumers like myself who are fed up with the abusive practices some bad actors in the broadband industry are engaged in and have no reason to obfuscate, lie, or hide the facts;
• Providers like cable and telephone companies that actively lobby to keep regulation and oversight at bay in hopes of continuing their free-wheeling ways, even if it harms consumers;
• Lobbyists and astroturfing organizations that receive a substantial amount of funding from those providers to bolster industry opinions on issues, create fictional, biased studies to prove industry theories, and whose very existence relies on the generosity of the corporations that pay their expenses;
• Employees of astroturf organizations whose paycheck comes from “sharing” the same positions on issues as their benefactors, and whose credibility would fall seriously into question should the direct financial link between providers and their paid mouthpieces be exposed to the public.

The most absurd part of this play is that I, as a consumer, am paying for all of it, and am the only one in the group not getting anything from it.  Providers are paid. Lobbyists are paid. Astroturfing groups are paid.  Mr. Lakely is paid.  I am not paid.  In the end, that makes me the guy that can walk down any street day or night and never fear that someone driving by will roll their window down and ask “how much?”

Pretend? C’mon. By even the Federal Communications Commission’s own research, the vast majority of consumers in this country have several choices of broadband providers. I have AT&T’s DSL service, a technology that is fine for me (at the moment), but is largely considered pedestrian. Cable is better. And fiber is better still. If I’m living in a fictional world, I’d love to ask the author of my fate for a few revisions — none of which has anything to do with how fast my connection is.

Most Americans have the following choices for broadband service:

1. Cable company
2. Telephone company (DSL or fiber in limited areas)
3. Clearwire WiMax (significant ownership interest by cable and mobile/cellular industry)
4. Mobile broadband (owned by cellular industry)

Cable and telephone companies are the two wired providers capable of providing broadband at the fastest speeds.  Clearwire WiMax is being leveraged by the cable industry to offer wireless broadband to their existing customers.  What are the chances Clearwire is going to bash their cable investors while competing for customers?  Mobile broadband remains useful only for web browsing and e-mail because of onerous usage caps, speed issues, and pricing (which virtually every provider sets at the same level: $50/5GB per month).  I didn’t even bother with satellite, because current providers offer service only slightly better than dial-up when used in real world conditions.

Your choice in broadband technology has everything to do with speed.  In “broadband backwaters” where competition is exceptionally light and increasingly in areas where a fiber or advanced DSL product is not forthcoming, there is simply no competitive pressure to increase speeds no matter how loudly customers demand them.

The horror! ISPs earn “healthy profits” by providing a desirable service. It is here that Free Press and the rest of the net neutrality crowd reveal an ingrained anti-capitalist sentiment. We’re to believe that an ISP, earning healthy profits (which please both the company and its shareholders) are upset that demand for their services increases. In response, they do not see a great opportunity to expand their business and attract even more customers, but to “actively reduce investment.”

No. Instead the logical response is to be “neglectful,” and let rival ISPs in an ultra-competitive market swoop in and steal away their disaffected customers. That makes no sense to anyone who has any knowledge of how free market capitalism works. Verizon announced in 2006 that it planned to invest $18 billion in building out its fiber ViOS product by 2010. Why? Because it wants to (gasp!) pursue profits by serving more and more customers. I could care less about Verizon’s business plan — other than to note that without any government funding or “plan,” it seems to be moving quickly to bring more broadband options to more people.

The only thing Lakely avoids in this dramatic overreach is calling me a “socialist.”

Two important points here.  Lakely should take his free market crash course to companies like Time Warner Cable who are doing exactly what he proclaims makes no sense:  Broadband customers up.  Demand for bandwidth up.  Investment to upgrade networks to handle increased demand… down!

Lakely’s mistake is to assume that free market capitalism is always benevolent towards consumer interests, presuming they are first on the minds of providers when making any strategic changes in their business plans.  But, for those who have lived under a throttled and capped broadband regime, like in Canada, or those in four American cities that were to be subjected to an unwarranted, unwanted pricing “experiment” on the part of Time Warner Cable to engage in all of the classic Internet Overcharging schemes – usage caps, consumption billing, overlimit penalties and fees, what the consumer wanted was completely irrelevant to the provider.

Time Warner Cable answers to investors, who howl over increased capital and upgrade costs in a normal economy.  In this one, spending on virtually anything is scrutinized.  Indeed, Wall Street even shudders at the thought of financing a competitor’s efforts to overbuild into another provider’s service area because it might launch a price war — a disaster for the Wall Street guy even if it’s a boon for consumers.

Lakely brings up Verizon, but leaves out the hostile reception many on Wall Street continue to have about the construction of that fiber optic network they call overspending:

FiOS has been very popular with consumers because it offers faster Internet service, more high-definition video channels and more bells and whistles than most cable systems. But Mr. Moffett’s argument is that what is good for customers is not good for investors.

“If I were an auto dealer and I wanted to give people a Maserati for the price of a Volkswagen, I’d have some seriously happy customers,” said Craig Moffett, an analyst with Sanford C. Bernstein. “My problem would be whether I could earn a decent return doing it.”

Stopping the monetizing of Internet traffic and treating content equally isn't Net Neutrality, it's Socialism in the eyes of some special interest groups.

Verizon thinks so, but has to spend an inordinate amount of time trying to convince short-term-thinking investors and skeptical darlings of the Wall Street media like Moffett that serving your customers with excellent service keeps them as loyal customers generating reliable returns.

Other companies, like Time Warner Cable, are much less interested in “seriously happy customers” when it launched its “experiment.”  Of course, it limited its exposure by choosing markets where customers lacked a safety valve alternative providing equal levels of service.  In Rochester, Frontier Communications retains a 5GB usage limit in their Acceptable Use Policy (currently not enforced) for broadband service and relies on traditional DSL service.  In other nearby cities from Buffalo to Syracuse, and further downstate, Verizon FiOS is merrily wiring fiber optic service that does not have hostile customer policies, much faster service, and subscribers can freely switch.

When “experimenting,” it’s probably safer to choose a market that doesn’t have a powerful company like Verizon just waiting to pounce.

Where lower speed DSL prevails and the upgrade frenzy is nowhere to be found, it’s been much easier to simply maintain the same service year after year.  No major upgrades.  No market-changing shakeups.  Just keep cashing the checks.

In some communities in the United States, such as Wilson in North Carolina, the duopoly simply refused to upgrade service no matter how often people begged and pleaded.  The city finally decided to run a bond issue to finance the construction of their own municipal fiber optic network, and the incumbent providers did two things — try and stop it at all costs, and when that failed, finally made plans to upgrade their own networks to compete.

Lakely and I do agree: competition is wonderful.  But I always add “when it exists.”

What happens when that competition doesn’t appear is an issue Lakely prefers to tap dance around, misstating my own position in hopes his readers won’t notice:

Super. Hurray! I wish the petitioners luck. But why, in a free-market economy, must the government force Verizon to “overbuild” in Rochester? Or why is it essential that taxpayer money be used to fulfill the wishes of some Rochester petitioners?

No reader here has ever seen me advocate the government “force” Verizon to overbuild my community.  In fact, I’ve always been skeptical Verizon could be attracted to compete here legislatively or with $10 bribes would-be customers mail to Verizon corporate offices to show there is demand here.  That’s because the telecommunications industry is loathe to overbuild in someone else’s territory.  Phone companies and cable companies will nominally compete, but two traditional phone companies and two cable companies going head to head is something else.  Nor have I advocated taxpayer money be given to Verizon to build a network in Rochester.  In fact, it’s the providers themselves who want the government handouts without oversight of what they do with that money.  By the way, does the Heartland Institute oppose broadband stimulus funding?

The tapdance continues when Lakely attempts to connect two different ideas to suggest they are contradictory:

There’s a lot to unpack from Dampier’s post, including the following contradictory passages:

The only thing Net Neutrality protects IS the status quo, a free and open Internet.

Followed shortly by …

… in a world without codified Net Neutrality protections — the free market at work under today’s reality — we’re seeing continued evidence of price increases and a decline in investment in networks, and some providers continue to drag their feet on upgrades.

So which is it? Is “today’s reality” worth preserving? (My view.) Or are government controls needed to protect the “status quo.” Can’t really have it both ways — unless your not really being clear about what it is you advocate.

Nice try.  A law codifying Net Neutrality protects the free flow of traffic on the Internet tomorrow from the “monetize and control everything” mentality customers are already fighting providers about on pricing and usage limits today.

A foreshadowing of broadband service in America without Net Neutrality principles protected by law can be found in Canada.  Do as Lakely suggests and it’s only a matter of time before broadband providers begin throttling speeds of undesirable online applications, favor traffic from paid content partners over those who didn’t pay for that privilege, and use traffic management to delay necessary infrastructure upgrades to meet the needs of paying customers.  Customers will discover “blazing fast speeds” only from those websites that ponied up the money to guarantee that.  In short, an online protection racket.

Provider mentality under “the free market at work under today’s reality” tells the story of what broadband customers are facing today in this country — Internet Overcharging schemes, astroturfing propaganda efforts to bolster claims that “controls” are necessary to balance traffic, and financial reports illustrating a pervasive lack of willingness by some providers to upgrade their networks.  All this makes selling those “controls” to a frustrated public waiting for a web page to display much easier.

Be it trying to fiddle with the traffic passing through a network, or overcharging for access to it, the only reason consumers are increasingly calling for government oversight and protection is because providers have engaged in practices which demand such a response.

And those who want to impose their vision of how the Internet should work under the guise of “net neutrality” want to change it. I don’t think they make a very good argument for messing with a market that has brought the world the online wonders we take for granted.

Lakely has it entirely backwards.  The Internet’s vision has, since inception, been one where legal content traveled freely without foe or favor.  It was the providers that sought to change the “vision” (or as they would see it, their “business model”).  Lakely and I agree that the Internet has brought online wonders we take for granted.  But I know that is threatened when providers decide to control and monetize it.  That’s about as acceptable as charging your aunt in San Francisco for a long distance call you made at your own expense, all because it traveled across the phone company’s wires.

Although Lakely did some pretty serious taffy pulling to stretch my arguments to fit his premise, his most recent hit piece on Free Press was a site to behold:

McChesney is an avowed socialist/Marxist. Through Free Press, he is promoting an agenda that would replace the free market system that has led to once-unimaginable advances in information technology — including freedom of communication — with a state-controlled system directed by government on behalf of “the people.” In short: McChesney and Free Press see the Internet as the last, best realm to finally usher in the long-dreamed socialist utopia.

Establish net neutrality principles by force of law, and the socialist/Marxist revolution (at least online) is underway.

Part two will follow shortly.  Stay tuned.

Oooh, can’t wait for that.  (Make sure you throw in some Hugo Chavez references.  No self respecting “socialism under every rock” rant is worth reading without some Chavez sprinkles on top.) I just hope Lakely gets it written before he and his industry friends get their way.  Otherwise, he’ll discover providers at his door demanding some ‘scratch’ to protect the Heartland Institute’s position as a “preferred content partner.”

What I am sure really upsets Lakely and his astroturf friends is that the Internet has allowed individuals to determine the merit and value of content based on its quality and integrity, not based on how much money is blasted into the amplification process.  The proof of this in action exists right here, right now.  Stop the Cap!, funded by me out of my own pocket and run in my spare time, with the help of other consumers volunteering to contribute their own content here, can stand toe to toe with an industry-funded Heartland Institute trying to create a right-left divide on an issue that is neither.

That leaves groups like theirs forced to respond to ordinary consumers like myself capable of blowing astroturf fluff out of the water with the most basic research and application of common sense.  To think, a consumer website without the six or possibly even seven figure annual budget astroturf groups blow through can get as much attention and exposure as even the most well-financed industry propaganda festivals, all because of a free and open Internet.

That burns up the special interests to no end.  That’s not a people-powered “socialist utopia.”  That’s consumers fighting for their rights, organizing consumer-powered activism, and taking on, and hopefully eventually taking out, the special interest lobbyists that work against our best interests, and are well paid for doing so.  No wonder Net Neutrality represents a threat so serious, it can provoke rhetoric invoking the Red Scare.

“It helps no one if broadband subsidies flow to ‘overbuilders’….” Matt Polka, American Cable Association CEO

“We will have government-created competition.” Cable One senior vice president and chief sales and marketing officer Jerry McKenna

America’s cable companies are having fits of anxiety over $7.2 billion dollars in broadband stimulus money that isn’t just going to fall into their laps.  “There are a lot of strings on that money,” one executive told Multichannel News this week in a piece that truly feels for the plight of the nation’s cable operators, concerned that billions of dollars could end up stimulating competition in the rural broadband marketplace.

The horror.

Granted, there are some concerns with some specific conditions which will likely represent little or no impediment to big regional telephone companies, and those like Frontier Communications, which specialize in servicing rural customers (and will likely apply for a substantial amount of broadband stimulus money), but will potentially lock out a lot of “mom and pop” operators.

Among them are requirements that a “first lien” be granted to the Rural Utilities Service, a USDA government-run administrator of the broadband program.  That has some banks, which small providers would likely use to finance some up front construction costs, up in arms.  A first lien would leave the government first in line for any asset recovery from a failed project, not the bank.

But some small providers are also upset with a requirement that any completed projects be held within that provider’s portfolio for a minimum of 10 years.  That provision, according to government officials, was added to prevent bottom feeder “flippers” from creating new companies tailor-made to fit broadband grant criteria, receive substantial amounts from the government to build projects, and then quickly sell them to the highest bidder when complete, pocketing the profits.

But the overwhelming concern expressed by 70% of cable operators surveyed by the American Cable Association at their ACA Independent Show held in late July is the fear of competition.

Many small-operator executives said that they feared the broadband stimulus would create competition — one said the money would go to “charlatans who would ruin the business.”

Cable One senior vice president and chief sales and marketing officer Jerry McKenna, who after his panel session at the show said that his MSO will likely apply for two or three broadband projects, was even more direct.

“We will have government-created competition,” he said.

As a result of the realization that free government money was simply not going to fall from the sky into their hands, many of the nation’s cable operators have stomped their feet and thrown fits, finally resulting in more than half declaring they were either not likely or absolutely certain they would not apply for a penny.  It’s their hope the federal government will see a dearth of applications, assume the process is too onerous, and dramatically loosen up the rules.

“If they get an overwhelming number of applications, the administration will see this [program] as a success,” American Cable Association director of regulatory affairs Ross Lieberman said at the show. “If there are not that many applicants, if there is no incumbent interest, we can expect changes to this program.”

Changes have already been made at the behest of lobbyists, who are now given a freer reign to pursue broadband policies more amenable to their clients.  Also changed are the definitions of what constitutes an underserved or unserved area, and with the broadband mapping project at risk of being run by the providers themselves, those definitions could eventually become meaningless anyway.

But providers fearing an “overbuilder,” a competing company that strings its own cables and provides true competition, need not panic just yet.  As they nail bite about the decision to apply or not apply for broadband stimulus money, risking if they don’t a competing provider may, the government has graciously provided a 30 day window for incumbent providers to submit a formal challenge of other applicants for up to 30 days after the deadline.

Every application will be publicly posted online at BroadbandUSA.gov.

Telecommunications providers have convinced the Commerce Department to stop asking too many questions about the Internet service their customers receive, including the fees providers charge and the speeds provided, because the information is “proprietary” and “useful to our competitors.”

It’s all a part of the federal government’s broadband mapping project — to create detailed maps showing who has access to what types of broadband, at what speed and at what price.  Those areas deemed underserved would be eligible for substantial broadband stimulus grants, paid for by taxpayers, and likely will be received by many of the same ISPs who are telling the government to butt out of their private business affairs.

In lieu of the detailed customer information the Commerce Department had been seeking, Verizon, Comcast, and AT&T have agreed to provide generic data about prices charged on a per-block basis and will also clue in the government as to the maximum speeds marketed to consumers, even if those speeds are not actually provided to individual customers.

Consumers Union was not happy with the Commerce Department’s decision, likening it to a cave-in.

Because the federal government will not allow the public to learn about the actual speeds achieved by customers, companies can continue to market and charge for an Internet service that doesn’t come close to achieving the speeds promised in advertising, according to Joel Kelsey, a telecommunications policy analyst for the consumer watchdog.

ISPs, particularly telephone line-based DSL service, routinely advertises speeds “up to” a certain level, but never guarantees those actual speeds will be achieved by customers.  DSL service is sensitive to the quality of the telephone line and the distance of the cable between the customer’s home or business and phone company facilities.  Longer distances always mean lower speeds, often much lower.

Cable companies rely on a shared bandwidth model, which means every home in a neighborhood shares a set amount of bandwidth.  The more users on the system, the slower the maximum speed.  In areas where cable companies have not upgraded service, or split neighborhoods up to reduce the number of residents sharing one “node,” speeds can dramatically drop at peak usage times.

“The actual speeds delivered to particular areas simply doesn’t match up,” Kelsey said. “The government gave a lot and received very, very little in return.”

ISPs complain that revealing these details will be useful information for competitors, and have steadfastly refused to provide it, despite the potential for those same companies to enjoy taxpayer dollars in the form of grants to finance specific broadband projects.

Since the federal government will rely heavily on the broadband mapping project to determine what projects have merit and meet an immediate need, who controls the map will have major influence on what projects will appear most eligible for stimulus money.

Public Knowledge continues to criticize the broadband mapping project as already being overrun by telecommunications special interests.  Connected Nation, a group tailor-made to be granted approval for statewide mapping initiatives, has a board heavy with telecommunications corporation representation.

Art Brodsky, communications director of Public Knowledge, has implied the telecommunication ‘fix’ is already in, but conceding even more to the telephone and cable industry threatens to turn the broadband stimulus program into a creature of big telecom.

“The whole mapping exercise is already on its way to being substantially corrupted as the telecom industry’s creation, which exists to prevent data from being public, is collecting mapping contracts right and left through the efforts of their lobbying and influence. There is absolutely no reason for the National Telecommunications & Information Administration (administering the data collection process) to concede on the data collection. NTIA and its supporters in the Administration and in Congress should realize that if agency backs down on this assault from the industry, there will be that much less of value worth saving,” Brodsky wrote.

“At the end of the day, somebody is going to be in control of the mapping. It will either be the public, and the public interest, as represented by NTIA, or the industry,” he concluded.

The cable and phone companies declared victory.  The American Cable Association, which represents smaller independent and rural operators which stand to receive a substantial amount in stimulus taxpayer funding, applauded the decision saying the government backing down would “improve and expedite the mapping effort,” said ACA president Matthew Polka.

Surprisingly, Larry Landis, a Republican-appointed Indiana utility regulatory commissioner and chairman of the federal-state group that will be responsible for the mapping project, also applauded the Commerce Department’s flexibility on getting access to detailed information.

Landis has past ties, albeit on the periphery, with AT&T through his former employer:

From 1985 through 1991, Landis was Vice President/Account Planning at an advertising firm informing the agency’s creative direction for clients such as Indiana Bell (now AT&T Indiana), at Handley & Miller, Inc.

The Center for Public Integrity graded the state of Indiana with a “C” for disclosure of utility commissioner outside ties in 2005.  No apparent direct ties to telecommunications interests were found in Landis’ 2004 disclosure, the last one available from the Center.

Up to $350 million taxpayer dollars will be earmarked for the mapping program, tainted as it might be according to critics.  The final map will be vital to determine what recipients will qualify for the $7.2 billion dollars in available funding for grant-worthy broadband projects.  The money will be awarded to for-profit and non-profit groups, typically those that can best tailor their funding request to the requirements specified in the grant application process.

Daryl Kramp, MP for Prince Edward-Hastings, announcing broadband initiative in eastern Ontario

Daryl Kramp, Member of Parliament for Prince Edward-Hastings, on behalf of John Baird, Canada’s Transport and Infrastructure Minister, and the Honourable Leona Dombrowsky, Minister of Agriculture, Food and Rural Affairs for Ontario, announced that the construction of a 21st century broadband network is a step closer in Eastern Ontario. The Government of Canada and the Province of Ontario have together set aside up to $110 million for the project.

“Our Government is delivering on investments that help create jobs and build sustainable communities,” said MP Kramp. “The construction of a broadband network in Eastern Ontario will help to expand and improve local businesses and their services, and significantly boost our regional economy.”

“Delivering broadband to Eastern Ontario is a critical infrastructure investment that will bring more industry to the region and create the jobs that will help our towns and rural communities prosper,” said Leona Dombrowsky, Ontario Minister of Agriculture, Food and Rural Affairs.

“Today’s announcement marks a major step forward in helping to secure the future prosperity of Eastern Ontario. Having a high-speed, high-capacity broadband network is one of the most important assets that we can utilize to assist us in unlocking the ingenuity and creativity of our people and businesses. We are extremely grateful to both the federal and provincial governments for their tremendous financial support for this project,” said Ron Emond, Chair of the Eastern Ontario Wardens’ Caucus.

The governments of Canada and Ontario will each set aside up to one-third of total eligible costs of the project, to a maximum contribution of $55 million. Eastern Ontario Wardens’ Caucus (EOWC) Incorporated and private sector partners will provide the remaining funding, with EOWC Inc. contributing up to $10 million. The total eligible costs of this project are estimated to be $170 million.

Once completed, the network will provide broadband service to the residents and businesses in many of the counties of Eastern Ontario (Hastings, Peterborough, Renfrew, Northumberland, Haliburton, Frontenac, Lanark, Prince Edward, Lennox & Addington, the United Counties of Stormont, Dundas & Glengarry, the United Counties of Prescott & Russell and the United Counties of Leeds & Grenville) as well as the City of Kawartha Lakes.

Many of these areas already have rudimentary broadband service in the form of DSL and limited cable television penetration, but many DSL accounts are speed limited to 1-3Mbps, which the EOWC has determined to be woefully inadequate for broadband applications of the near future.

Canada’s broadband initiatives outside of the most rural communities are starting to define the bare minimum network speed at 10Mbps for downloading if the network is to sustain viability in the future.  With a goal of reaching up to 95% of eastern Ontario with broadband service in the next four years, a variety of technologies are likely to be considered depending on the population being reached.  Those living in the most rural areas are likely to find wireless service the most viable option, delivered with a form of WiMax.  Rural enclaves or neighborhoods outside of community centers may continue to be served by DSL service for some time.  But those in suburban and more urban community centers should have access to advanced forms of DSL, fiber optics, or high speed wireless service.

Many public Wi-Fi “hotspots” will be established at community gathering points, accessible to visitors at no charge.

The Government of Canada’s 2009 Economic Action Plan is accelerating and expanding the existing federal investment of $33 billion in infrastructure across Canada with almost $12 billion in new infrastructure stimulus funding over the next two years.

Through the 2009 Ontario Budget – Confronting the Challenge: Building Our Economic Future – the province is investing $32.5 billion in infrastructure for the province of Ontario over the next two years, including a $5 billion contribution from the federal government that will support more than 300,000 jobs and strengthen Ontario’s economy.

Every Time Warner Cable division has different policies for installations, service calls, and disconnect requests.  Some charge for technician visits, some do not.  In southern California, Time Warner Cable is trying to reduce the expense of “truck rolls” — technicians visiting customer homes, to handle Road Runner installations.

The company announced Wednesday it would provide free Easy Connect self-install kits for broadband service.  Mailed at no cost to customer homes within 24-48 hours, the kit contains a cable modem, connectors, and instructions on how to set up and configure Road Runner service.

Time Warner Cable technicians will continue to install Road Runner for a $19.95 installation fee.  Company officials believe many customers will be able to hook up service themselves, which will ultimately save the company time and money assigning a technician to do the installation.

A Broadband Reports reader from Zephyrhills, Florida was invited by E-Rewards, an online focus group, to give views on some new names and pricing for higher speed Road Runner tiers.  “Molitar,” a customer of Bright House Networks, which also markets broadband service under the Road Runner name, reports being asked impressions about new speed tiers, including faster downstream speeds of 30Mbps or more and one offering 5Mbps upload speed.

At least five different names were offered, with consumers invited to give their impressions.  Among the names: Road Runner Flash, Road Runner Extreme,  and Road Runner Lightning. “Molitar” preferred Road Runner Extreme.

Also asked: what kind of pricing customers would be willing to pay for the new premium speed services.

Assuming the facts were as the reader reported, this would likely impact residents in New York City first, where DOCSIS 3 upgrades are well underway. As upgrades begin in other cities, presumably such speed tiers would also be introduced. Those reported speeds would not likely be offered in areas where upgrades have not taken place.

Time Warner Cable has been one of the more stingy providers with upstream speeds. Many cities, including Rochester, New York have never seen a speed increase for standard Road Runner service since the product was introduced more than 10 years ago. At just 384kbps, uploading large files has been painfully slow. Road Runner Turbo, a $9.95 monthly add-on, is coveted for uploaders if only for the increase in upstream speed to 1Mbps, at least in Rochester. But many other Time Warner Cable markets offer Turbo upload speeds of 2Mbps.

Roscoe P. Coltrane and "Flash"

Speed based tier pricing is welcomed by Stop the Cap! We are supporters of providing customers with the choice of different pricing levels of service based on different speeds. “Heavy downloaders” and other “extreme” users of broadband service will gladly pay premium pricing for better service, providing enhanced revenue for operators like Time Warner Cable and bringing positive goodwill from customers who are anxious to see speed increases and are willing to pay to get them.

What we oppose, of course, is Time Warner Cable introducing consumption-based billing which curtails innovation, punishes subscribers for using the service as it was marketed to them in the first place, and sets up scenarios for massive profit-taking from consumers subjected to overlimit fees and penalties.

Time Warner Cable’s latest investor conference call featured company executives touting their initiative to give Time Warner customers access to as much content as they want, when they want, and where they want to see it. If they intend to honor that commitment, punitive consumption-based pricing denies customers the ability to access as much content as they want, makes them think twice about getting it out of fear of running over their “allowance,” and will drive customers to look elsewhere for broadband service, if not also taking their video and telephone business to another provider as well.

As for me personally, I’m not thrilled with any of those product names. Road Runner “Flash” does nothing for me at all, except reminisce about Roscoe P. Coltrane’s lazy basset hound with that name from the TV series Dukes of Hazzard (Friday night in our household growing up didn’t provide me with remote control privileges). Road Runner “Extreme” is already overused as a concept, and I frankly thought it was already in use. Road Runner “Lightning” reminds me of Frontier Communications’ older name for DSL service: Lightning Link.

I suppose Road Runner Max might be better, perhaps supplemented with the download speed as a suffix. Road Runner Max 30 for 30Mbps downloading, and so on.

Share your ideas in the comments section. Maybe we’ll offer it to them if they promise to honor the fact gas gauges belong on automobiles, not on broadband service.

Earlier this year, some Stop the Cap! readers in North Carolina who attended the hearings on a pro-telecom (actually it was written by them) piece of legislation designed to stall statewide municipal broadband competition encountered strange protests from conservative groups arriving on buses.  They were there to stop “Obama’s government takeover of the Internet.”  The communities of Wilson and Salisbury, which have municipal broadband projects in progress, also encountered resistance from outside groups.  Salisbury residents even began receiving biased phone polls that turned out to be sponsored by a conservative political action group that was also involved in the conservative “tea party” movement.

"Critics say .... it appears that the group was a 'mouthpiece' for hire." -- St. Louis Post-Dispatch

These groups loaded mostly retirees, recruited from talk radio and websites, onto buses and sent them to the state capital with generic anti-government talking points and signs.

FreedomWorks, which is currently in the news for organizing protests at town hall meetings over what they call “Obamacare” health care reform, has also been busy adopting the industry-friendly position of opposing government involvement in broadband.  They oppose anything resembling regulation, any government involvement in the pricing or availability of broadband service, and recite industry talking points about the free market assuring Americans of the world’s best Internet service.  Unfortunately, these talking points come at the same time the United States slips further and further behind in international broadband rankings, and true competition in most markets is limited at best.

FreedomWorks’ position on broadband policy will sound eerily familiar:

The broadband market is dynamic and fast paced; new FCC regulations could hamper this growth and reduce the vital capital investments required to expand the nation’s broadband networks.  Rather than attempting to apply old monopoly based models to today’s competitive markets, the FCC should focus on removing barriers to competition, implementing competitive solutions to policy questions, and allowing the private sector to more effectively allocate scarce broadband resouurces [sic] to the most highly valued uses.  In addition, efforts to establish “net neutrality” should be avoided, because they threaten the ability to manage dynamic networks effectively.

That is paraphrased directly from the talking points the industry has presented about broadband policy for years.

Now many of these groups are attempting to recruit those who dislike the current administration to provide free shilling services for the broadband industry’s agenda, supporting positions that are directly opposite  consumers’ best interests.

FreedomWorks is hardly new at this.  Back in 2006, Fiona Morgan, writing for the Independent Weekly (North Carolina), covered another bandwagon of protesters who showed up at an arcane meeting of the North Carolina House Revenue Laws Study Committee, all wearing FreedomWorks t-shirts:

The details of telecom legislation like this are wonky, complicated and jargon-filled. But that hasn’t dampened the passions of citizens fed up with the de facto monopoly of TimeWarner, with its astronomical rates for “packages” of unwatched channels. Dozens of people from across the state showed up to a meeting in April of the House Revenue Laws Study Committee wearing T-shirts for FreedomWorks, a group clamoring for the proposed state franchises. FreedomWorks, which is connected with the anti-tax conservative group Citizens for a Sound Economy, is funded by telephone companies pushing for the bill–what you might call an Astroturf (phony grassroots) organization, but the passion of its members is very real.

With astroturfers like FreedomWorks, deregulatory principles that might garner legitimate debate and consideration are tainted when it turns out that advocacy is bought and paid for by directly connected business interests who have a dog in the fight.  That’s why FreedomWorks hardly represents the “grass roots.”  It’s an astroturfer that has a corporate-sponsored agenda, but hides behind good American conservative citizens who find themselves proverbially loaded onto buses and taken for a ride.

Those consumers had a right to be fed up with paying for unwatched cable channels, but their appearance at that meeting was the lowest form of manipulation, because the legislation under review had nothing to do with the issue those people were concerned with.

Instead, their presence was used by the telecommunications industry as illustrative of consumer discontent, and de facto support for their real agenda, which was removing oversight of the video service franchising process from local government and turning it over to an industry-friendly state body.  That would have created statewide cable and “telco TV” franchises that take away local control and oversight.

Chad Johnston of the People’s Channel, Chapel Hill’s public access station said all the passion around TV service is being used to mislead the bill’s supporters. “It’s funny, because many of the comments that the FreedomWorks folks brought up in this meeting were things that aren’t even included in this bill, like being able to chose your channel lineup–that’s a whole different issue,” Johnston says. “This notion that it’s going to bring us gobs of choices and lower prices it totally false, based on everything we know about deregulation and the telecom industry.”

Heartland Institute: "By not disclosing our donors, we keep the focus on the issue."

Now, another astroturf group that shares “researchers” with FreedomWorks, the so-called Heartland Institute, has an Op-Ed Tuesday in the conservative Philadelphia daily The Bulletin.  Of course, the Heartland Institute also has close ties not only to big telephone companies, but is a dependable friend of big cable as well.  Those close ties are, predictably, omitted from the article.

A typical horror story involves an ISP, at peak usage hours, gently slowing down a tiny number of bandwidth hogs so the vast majority of its customers can surf the Web and send emails at the speed they expect. Insisting such a policy is unfair is not only counterintuitive, it’s counterproductive to demand the government stop it.

The Internet Freedom Preservation Act of 2009 is poorly named because it would do nothing to preserve freedom. HR 3458 would strip ISPs of the right to manage traffic on the networks they have spent billions to build, market and manage. In their place would emerge a cadre of detached government bureaucrats—hardly an improvement on the status quo.

The takeaway word from the first section is “story,” as in fiction, because that is what that talking point represents.  Once again, the Us vs. Them strategy reveals itself, with stories of some guy next door sucking the neighborhood Internet lines dry downloading.  The true horror is some providers continue to earn healthy profits on their broadband revenue, complain about the growth of traffic on their networks, and actively reduce investment to expand that network.  That, of course, helps build the case for “controls” when consumers notice the slowdowns created by those neglectful policies.

The Heartland Institute advocates the provider be given the enviable role of the fox guarding the hen house.  Providers manage profits quite effectively, and just as some try to tweak pricing models to extract extra revenue from consumers, you can count on those same providers creating new revenue streams from “premium” prioritization of Internet traffic, for a price, while leaving everyone else in the slow lane.  Their own products and services carried on those lines will enjoy beneficial priority for free while direct competitors find they can’t obtain that level of service at any price.

The so-called “cadre of government bureaucrats” is anything but.  The truth is, there will be one set of clearly defined standards that will protect the level playing field the Internet deserves.  The piece makes it sound like there will be a government court to render judgment on every policy and practice, which is false.  The only thing Net Neutrality protects IS the status quo, a free and open Internet.

Today, if a broadband customer does not approve of the way an ISP manages Web traffic, he can readily switch to a competitor more to his liking. ISPs have an enormous financial incentive to retain existing customers and attract new ones, so the free market encourages best practices.

Tell that to Canadians who are enduring not only Internet Overcharging schemes like usage caps and consumption billing, but also throttled speeds that artificially reduce (by up to 99%) the advertised speed for certain applications, all for “good network management.”  Don’t like the throttle from Bell on your DSL line?  Switch to Rogers Cable and get more of exactly the same thing.  A free market cannot truly exist from the monopoly most rural residents face for broadband, and the duopoly most of the rest of us endure.  The current market doesn’t encourage “best practices;” it encourages informal collusion by providers who learn not to rock the boat, especially on competitive pricing.

ISPs have an enormous financial incentive to find ways to increase profits, which is precisely what Internet Overcharging is all about.

But under HR 3458, if a broadband customer is not satisfied, what near-instant recourse will he have? None after government forces every ISP to operate “equally” by replacing market-based incentives with bureaucratic mandates. This would ensure an inevitable slide to “equally” shoddy service.

One would assume a provider would want to make their service as robust and up to date as possible, yet in a world without codified Net Neutrality protections — the free market at work under today’s reality — we’re seeing continued evidence of price increases and a decline in investment in networks, and some providers continue to drag their feet on upgrades.  The only market based incentive at work here is the demand from Wall Street for greater revenue and return from providers, who face challenging times in their video and telephone businesses, but can always leverage the success of the broadband division.  Broadband continues to maintain customer loyalty, and the potential for greater return from price increases and forcing costs down by limiting service.

Net neutrality advocates want the government, not “the public,” to control the fate of the Internet. The ordered chaos of market forces may scare those who don’t understand it. But the market is efficient, quickly responsive to the needs and wants of consumers, and—in the proper sense of the word—free.

Actually, Net Neutrality advocates want the government to protect the “chaos” of the online world as it exists today.  Those who want to “organize” or “order” the online world aren’t Net Neutrality advocates, they are providers who don’t want people using “my pipes for free,” or cable interests who want to “organize” online video around a model they own and control, or who simply want to throw a Money Party by inventing new ways to charge people more money for exactly the same service they get today.

The claim that the market is “quickly responsive” to the needs and wants of consumers is demonstrably false for any consumer living in Wilson or Salisbury, North Carolina, where a duopoly of providers refused to provide the level of broadband service consumers and small business clamored for, so local municipalities finally threw up their hands and decided to build networks themselves.  Residents of Rochester, New York are threatened with a broadband backwater because the incumbent telephone company Frontier Communications has shown little interest in providing a fiber optic based 21st century broadband platform similar to one being constructed in virtually every other city of size in New York.  Customers even signed petitions begging Verizon to overbuild the Flower City to provide the service Frontier will not.

In April, Time Warner Cable “responded to the needs and wants of consumers” by attempting to ram an Internet Overcharging experiment down the throats of customers in four American cities, where not one consumer either needed or wanted such massive price increases.  Over a period of weeks, this provider did everything but respond to customer needs, until a wholesale consumer revolt erupted and Congress intervened.

The free market is working well for groups like FreedomWorks and The Heartland Institute, who enjoy healthy support from the telecommunications industry.  In return, finding where the telecommunications industry positions end and FreedomWorks’ positions begin is like staring into a mirror and trying to ascertain the differences between the reflection and yourself.