Until the National Broadband Plan is in place and additional capacity is brought online, Australians make do with usage limited broadband service from Brisbane to Perth.  With prices all over the map, choosing the right plan to minimize your exposure to Internet Overcharging schemes is more important than ever.

VoIP-Sol.com, an independent blog covering the global broadband market, took a look at several popular options and discovered some revealing findings (All prices in Australian dollars – $1AUD = $0.91US — Stated speeds are relative and reflect the maximum possible, not necessarily the actual):

The Fastest Broadband Plan in Australia
BigPond’s 30,000Kbps +400MB cable plan is the fastest available (that speed available in select areas of Melbourne and Sydney only — up to 17Mbps service elsewhere), but at a hefty price: $49.95 a month with a cap of 400 megabytes. Data past the cap is charged $0.15 per megabyte. BigPond will discount the monthly charge by $10 if it is bundled with a Telstra home phone line. This plan requires a monthly contract, and there is no peak time.

The Australian Broadband Plan With the Biggest Cap
iPrimus’s Big Kahuna and Dodo’s Rhodium plan both come with 200gb of service each month over ADSL. Dodo’s setup fee of $69.99, but the monthly charge is $10 a month cheaper than iPriumus at $69.95 a month, and an additional $10 is discounted for Dodo’s home phone customers. The Big Kahuna could go on the fastest list at 24,000Kbps, while Rhodium is a still impressive 20,000Kbps. (Keep in mind ADSL speeds vary considerably depending on how far away you are from the telephone company’s exchange office.)

Australia’s Cheapest Broadband Internet Plan
The Starter Plan from Netspace may seem like a bargain with speeds of 20,000kbps for only $9.95 a month, but the setup fee is a staggering $149.

Dodo Bronze is $19.90 a month, or $9.90 a month when bundled with one of their home phones, beating Netspace by five cents. However, this gives you a tiny download cap of 150mb, with an equally low download speed of 256kbps. Excess data is charged at $0.18 per megabyte, which even the most frugal user will probably reach. The Bronze plan also requires a twenty-four month contract.

Surprisingly, the next cheapest option is Optus’ Mobile Wireless Broadband. When included with mobile or home phone service, Optus charges $19.99 a month for cellular-based Internet. Like Dodo Bronze, the download speed is limited to 256Kbps, while downloads are capped at 1 GB. Most people who buy this plan will be more interested in the service’s convenience than its performance.

There are many other regional services available in different parts of the country with their own pricing and policies.  But nearly all share a usage cap combined with “peak” and “off-peak” usage pricing, designed to prod you into confining use of your highest bandwidth applications during off-peak hours (typically between midnight and noon).  Many providers give you a bonus usage allowance to use during off peak hours, often much higher than the peak usage allowance.  In Australia, providers don’t necessarily punish you with overlimit fees and penalties for exceeding your limit, they just turn the speed of your connection down… often way down (64kbps, slightly faster than dial-up, is common) once your limit is reached for the month.  Speeds return when a new billing period begins.

Australians complain about paltry usage caps with such regularity, the government has set about constructing better broadband infrastructure to improve service.  Private providers have dragged their feet, preferring slower upgrade paths and tamping down demand with usage limitations, reducing the need to invest in their networks.  Domestic online video services and other high bandwidth innovation is greatly stifled in the country because of punishing usage limits which make consumers fear using them.

With the expansion of international connectivity and a more robust domestic network, Australians look forward to the day they can see usage caps as a thing of their past.

A federal judge Wednesday ruled that Verizon Wireless can continue to run its 3G network ads, suggesting they might be “sneaky,” but are not misleading.  U.S. District Court Judge Timothy Batten Sr. told AT&T’s attorneys that their request for a temporary restraining order was denied, but the judge indicated he will hear new arguments in a second hearing on December 16.

AT&T claimed that Verizon’s “There’s a Map for That” ad campaign mislead consumers into believing AT&T provided no service in vast areas of the country because Verizon’s ads depicted non 3G service areas in white, a color that traditionally represents “no service” on many cell phone coverage maps.

Judge Batten said people casually viewing the ads might misunderstand the commercials, but a viewer’s misinterpretation “doesn’t mean they’re misleading.”

“Most people who are watching TV are semi-catatonic,” he said, prompting laughter from the courtroom. “They’re not fully alive.”

AT&T’s apparent backup plan is a new ad of its own, attacking Verizon Wireless with… Luke Wilson.

Actor Luke Wilson helps AT&T Mobility fire back at Verizon Wireless as the holiday season approaches. (30 seconds)

The effectiveness of Wilson’s spirited defense of AT&T is debatable, judging from early ad reviews.  We spotted one continuity error straight away.  At the 0:15 second mark, notice the “Access to over 100,000 apps” box is already filled with an “x” before Wilson turns to the board to fill it.  The “x” is there before it’s gone and back again.  Perhaps it’s an unintentional homage to the frustration experienced by AT&T-exclusive iPhone application developers not getting approval for applications previously approved.

Last spring, consumers across North Carolina banded together to oppose legislation custom-written by the telecommunications industry to keep municipal broadband networks from competing with cable and telephone companies.  Your efforts made a dramatic impact on state legislators and the bill was set aside.  One representative that helped push it has since resigned after being caught up in a campaign contribution scandal.  But we always knew the industry would be back.  The threat of competition, and a reduction in their fat profits, is too great to ignore.

HB1252 – The “Level Playing Field” bill, which is among the most ironically named pieces of state legislation around, will be in the North Carolina House Select Committee on High Speed Internet in Rural and Urban Areas on Monday morning at 10am.  For those of you who might want to attend, the meeting will be held in Room 415 of the Legislative Office Building at the General Assembly in Raleigh.

For those smart enough to recognize a telecom industry power play when they see one, a reality check for our state legislators is imperative.

I have been attempting to be added to the agenda to speak against HB1252 as a consumer.  So far, no call back.

I believe that I have a unique perspective on this issue, as I hail from Greensboro, one of the communities that experienced the attempt by Time Warner Cable to force classic Internet Overcharging schemes like metered billing and data caps on consumers in the Triad region.  These experiments came as a direct result of the large void many of us have in the area of competition.

HB1252 would make it next to impossible for municipalities to have their own city run broadband service to compete.  The city of Wilson made the dream a reality.  What costs a Time Warner Cable customer $180 to bundle cable, telephone, and Internet service together is on offer in Wilson from their municipal system for a mere $99.  That’s nearly half the price.

Wilson’s Greenlight system offers a direct fiber to the home connection to subscribers.  Wilson customers get speeds up to 100Mbps, ten times faster than cable or DSL.  What has Time Warner Cable done in Wilson to compete?  They reportedly cut their prices, particularly for consumers calling to cancel.

HB1252 will help protect Time Warner Cable and other providers in North Carolina from ever having to cut prices and take a profit hit.  By taking away your community’s right to provide service the cable and phone companies refuse to provide, at an affordable price, this piece of legislation assures you of paying more and having less choice.

If you cannot attend Monday’s session, you can still deliver a wakeup call to state legislators by reminding them you are paying close attention to this issue, and know exactly who is behind the push for HB1252.  Tell your representative Time Warner Cable and other telecommunications interests should not be ghost-writing legislation that favors them and protects their monopoly.  Ask your legislators to firmly oppose HB1252 and demand as much competition as the marketplace can stand, be it from phone, cable, wireless, or municipally run fiber to the home.

Here is the list of North Carolina representatives.  We won the first few rounds on behalf of North Carolina consumers.  Time to win one more!

One of the promised benefits of permitting the Verizon-Frontier spinoff is that Frontier will bring more and better broadband service to areas Verizon has ignored for years.  The company has been running television ads in West Virginia promoting Frontier’s promised “next generation” of broadband.  But what does that mean?

Frontier Communications is running this advertisement in West Virginia.

The West Virginia Consumer Advocate Division of the Public Service Commission brought in Trevor R. Roycroft, PhD., former Associate Professor at the J. Warren McClure School of Communication Systems Management, Ohio University, to examine the details behind the marketing and public relations push to promote the deal.

He was not impressed.

After an extensive review of confidential and public documents from Frontier, his conclusion was that Frontier’s DSL service is just plain bad, and for plenty of West Virginians who may only have one choice for broadband in the foreseeable future, being stuck with Frontier’s idea of broadband is particularly bad.

Indeed, Frontier’s idea of what defines “next generation broadband” would be true, if this was the year 1992.

“Frontier has made no commitment regarding improved broadband deployment in West Virginia. Frontier, while achieving higher levels of DSL availability in West Virginia, generally offers its broadband services at higher prices and provides lower quality than those associated with Verizon’s DSL. Frontier’s ability to increase broadband deployment in West Virginia will depend on the condition of the outside plant that it has acquired, which may negatively impact Frontier’s costs of deployment. Furthermore, Frontier must upgrade substantial numbers of customer locations outside of West Virginia, and West Virginia will be competing with this larger priority,” Roycroft writes in his testimony to the West Virginia Public Service Commission.

The infrastructure Frontier utilizes to deliver its broadband service is revealing even to those Frontier customers not directly impacted by this transaction.  Some of the documents Roycroft reviewed laid bare the nonsense the company has used to defend its Acceptable Use Policy language defining an “acceptable amount” of monthly broadband usage at just five gigabytes.  Company officials have said for more than a year that they were concerned about the growth of usage on their network, and its potential to slow service for other customers.  But company documents, included within the scope of Roycroft’s testimony, tell a very different story:

Frontier plans to increase its core backbone from its current level of 10 Gbps to a capacity of 20 Gbps (should the spinoff be approved). With regard to the capacity of its existing backbone, Frontier states:

Frontier expanded the backbone from OC 48 to 10 Gigabit Ethernet during the first half of 2009. Because of this network expansion we do not have peak usage for the past 12 months. No backbone link has peaked above 2.8 Gigabit/second or 28% of the capacity of a link since the augment was completed in 2009.

Thus, Frontier’s current backbone configuration appears to have excess capacity. With the expansion of its backbone network to 20 Gbps, the company’s current data traffic load results in about 14% of capacity being utilized at peak.

Potentially limiting customers to just five gigabytes of usage is so unjustified, in Roycroft’s analysis, its potential imposition on West Virginian customers should be a deal-breaker.

Roycroft ponders whether Frontier will invest enough resources to make sure capacity is not an issue. The only way Frontier’s network will show signs of strain is if the company makes a conscious decision not to sufficiently upgrade their network as they take on millions of new Verizon customers, or they dramatically underestimate the average Verizon customer’s usage.

Roycroft was also asked to evaluate whether Frontier’s claims of 90% broadband availability in its overall service area and 92% in its West Virginia territory rang true.

Roycroft writes that Frontier’s numbers don’t tell the whole story.  In five states, Frontier admits the percentages are notably lower, so no guarantee can be inferred for West Virginia based on Frontier’s talking points.

Frontier’s “Advanced” Broadband Network Is Hardly Advanced and Barely Qualifies As Broadband

Heavy criticism was leveled at Frontier for its “advanced” broadband service.  Roycroft compared Frontier DSL with several other providers and was unimpressed with the company’s broadband speeds.

Roycroft's table illustrates what's on offer from the competition

“Frontier’s advertised DSL speeds are generally much lower than those available from Verizon and other carriers. Based on a location-based search of Frontier DSL service offerings, it appears that Frontier’s most prevalent DSL speeds are 3 Mbps and 768 kbps (for download),” Roycroft said.

Frontier's DSL Speeds in Selected Cities

Although the expressed upload speed for Rochester should be listed at a higher rate (I managed around 512kbps myself), Roycroft is correct when he says, “it can be seen that outside of Rochester, NY, the DSL speeds associated with Frontier offerings cannot be considered ‘cutting edge.’”

Even while noting Rochester’s potential DSL speeds, real-world speeds are another matter entirely.

http://www.phillipdampier.com/video/Real World Frontier vs Road Runner Speeds.flv

One New York customer provided real world evidence of the significant differences in speed offered by Road Runner from Time Warner Cable and Frontier’s DSL (courtesy: 1ComputerSavvyGuy) (1 minute)

Frontier’s DSL offerings in West Virginia are of even lower quality. Frontier indicates that it offers three grades of DSL service in West Virginia:

Up to 256 kbps download/128 kbps upload;
Up to 1 Mbps download/200 kbps upload;
Up to 3 Mbps download/200 kbps upload.

These data transmission speeds, especially upload speeds, are at the very low end of commercial offerings that I have observed.

Comparing Verizon DSL vs. Frontier DSL Pricing & Gotchas, Contracts, and Internet Overcharging Schemes

Roycroft’s study found Frontier’s pricing significantly higher than Verizon for DSL service.

Frontier’s DSL prices, either with telephone service, or on a stand-alone basis, are significantly higher than are Verizon’s. For example, the entry-level Frontier plan has a nominal price that is 100% higher than Verizon’s.

However, when considering the per Mbps price, Frontier’s price is 160% higher. It is also notable that Frontier’s upload speeds are also low when compared to Verizon’s.  Consumers are increasingly relying on upload capabilities to share large files, such as videos. Overall, Frontier’s DSL products are low quality.

Comparing Prices

Roycroft also gave special attention to Frontier’s infamous 5GB Acceptable Use Policy, which he suggested was a major negative for West Virginia’s online experience.

Frontier indicates that it monitors network usage if “it receives a complaint of slow service or if it discovers that network bandwidth utilization is unusually high in a particular area.

Frontier was asked to identify any action taken against a customer associated with its acceptable use policy and, in response, the company stated that it has not “terminated a customer’s service based on exceeding the 5 GB threshold identified in the AUP.” However, the restriction on usage further raises the relative cost of Frontier’s service. Frontier indicates that consumers may face action by the company if they exceed the usage cap, thus indicating that the prices reflect both speed and volume. Verizon’s DSL service does not include a similar limit.

Frontier’s DSL pricing policies and usage restrictions will represent a significant negative impact on West Virginia consumers, should these policies be implemented in Verizon’s service area in West Virginia.

Even more importantly, Roycroft considered the argument for imposing such Internet Overcharging schemes as unwarranted.

“While DSL provides dedicated bandwidth to the customer in the last mile, DSL subscribers will share network capacity in the ‘middle mile.’ For example, shared data networks will carry consumer traffic from the telephone company central office to an Internet gateway. I believe that Frontier’s policy is more likely to reflect an unwillingness on Frontier’s part to invest in ‘middle mile’ Internet access facilities that would require capacity additions as customer demand increases, and choose to restrict customer usage instead of investing in the capacity needed to meet customer demand,” Roycroft writes.

“Furthermore, Comcast’s download-cap policy includes limits that are dramatically higher than Frontier’s. Comcast’s acceptable use policy identifies 250 gigabytes as the threshold at which Comcast may take action against a customer, which is fifty times the usage associated with Frontier’s policy,” he added.

Roycroft was also concerned about the many ‘gotchas’ that are part of Frontier’s marketing efforts which bring even higher prices to consumers choosing to have DSL service installed.

“To receive the services of Frontier’s technician, the consumer will incur a $134 fee unless the consumer signs up for a term service contract. Even with the term service contract, the customer must pay a $34 fee for the on-site set-up. Furthermore, the technicians that Frontier dispatches to new broadband customers’ homes are also sales agents. Thus, while it may be that these individuals can help with system set-up and the like, they also are part of Frontier’s overall up-selling strategy,” said Roycroft.

Frontier markets a variety of services to customers as part of their promotions and service offerings.  For instance, recent Dell Netbook promotions required customers to sign multi-year contracts for service, with an early termination fee up to $400 if the consumer chooses to cancel service.  Such promotions do not come out of the goodness of Frontier’s heart.  Indeed, such promotions provide even more revenue potential by pitching customers on its “Peace of Mind” services, which include computer technical support, backups, and inside wire maintenance for an additional monthly fee.

Customers don’t even qualify for many Frontier promotions unless they accept a bundled service package combining broadband with traditional phone service and a multi-year service contract.

Roycroft says West Virginia should demand modifications to Frontier’s proposal before it should even consider accepting it.  Among the changes:

• Frontier should be required to make broadband services available in 100% of its wire centers, and to 90% of its West Virginia customers by the end of 2013. Frontier should expand broadband availability to 100% of its customers by 2015.
• Frontier should be required to deploy and promote broadband services in West Virginia so that, by the end of 2013, at least 90% of its customers can achieve download speeds of 3 Mbps; 75% of its customers can achieve download speeds of 6 Mbps; and 50% of customers can achieve download speeds of 10 Mbps.
• To achieve these broadband objectives, Frontier should be required to exceed Verizon’s baseline level of capital investment by at least $117 million during the period ending December 31, 2013, or by an amount sufficient to meet the broadband objectives.
• Frontier should be required to offer broadband services at prices that do not exceed those currently offered by Verizon for 1 Mbps and 3 Mbps services, i.e., Frontier should offer services at Verizon’s advertised prices for 1 Mbps and 3 Mbps service (respectively, $19.99 per month and $29.99 per month) for a period of 24 months following the merger.
• Frontier should be prohibited from imposing its broadband “download cap” in West Virginia.
• Frontier should be required to provide individual written notice to its customers regarding the merger, and should notify customers of any change in services that result from the merger. Changes in billing format should also be clearly explained to customers, both in writing, and through a web-based tutorial.
• Frontier should be prohibited from migrating any Verizon customer to a Frontier plan that either increases the customer’s rates, diminishes the level of service, or has a materially adverse impact on any of the terms and conditions of the customer’s service. West Virginia customers should experience a rate freeze for a period of 24 months.
• Frontier should be required to allow former Verizon customers to take a “fresh look” at their purchases, including those customers who have term contracts with Verizon. All early termination charges should be waived for a period of 90 days following the merger, and the long distance PIC charge should also be waived for Verizon long-distance customers who select a long-distance provider other than Frontier.

Some Frontier Communications customers in western New York have been receiving notification that effective October 15th, the rental price of the ADSL modem Frontier provides customers increased $3.00 per month, from $3.99 to $6.99 per month.

Customers on a “price protection agreement” should not have seen this rental fee increase.  If you have, please let us know in the comments.

Frontier’s modem rental fee can often be avoided if you purchase your own DSL modem, assuming its compatible with Frontier’s system, and have them provision it for service.  Several of these modems appear regularly on eBay, sold by customers who ended up owning them after their term contracts ended with other providers.

One of the problems with Frontier’s DSL service is that the “out the door” price is significantly higher after taxes, fees, surcharges, and modem rental costs are factored.

Always insist on obtaining a total price, including all taxes and fees, before committing yourself to any ISP, particularly if a long term contract is involved.

Brian Whitton, Verizon's Executive Director of Access Technologies

At least Verizon is honest about it.  As providers contemplate slapping customers with usage limits, overlimit fees, and other tiered pricing systems, they’ve typically said they’re justified because of the strain they claim heavy users place on their broadband networks.  One network that doesn’t face that problem is Verizon’s robust fiber optic FiOS network, which is on the way to upgrading from the ridiculously fast current speeds to the “next generation” of FiOS speed: delivering 10 Gbps downlink and 2.5 Gbps uplink, shared among 32 locations.  That makes the cable modem competition, which shares slower speeds among many more customers wilt at the prospect.  DSL instantly becomes the dial-up service of the decade in comparison.

Make no mistake, Verizon tells all who ask: Fiber to the Home is near-infinitely upgradeable for decades to come, simply by swapping out some hardware at each end of the pipe.

Yet Verizon began making noises about ending its all-you-can-eat broadband buffet this past September, when Verizon Chief Technology Officer Dick Lynch said Verizon was in favor of consumption-based billing, too.

But why should Verizon FiOS, often priced higher than the cable competition, opt for Internet Overcharging schemes when it has a network that is nowhere near capacity and will increase its speeds even further next year?

As GigaOm’s Stacey Higginbotham found out, the answer is – because they can:

Brian Whitton, executive director of access technologies at Verizon did acknowledge how valuable broadband has become—precious enough that people will pay for premium access to it, especially those using up a disproportionate amount of network assets. “Ultimately this is the fairest cost-recovery model, and with a tiering plan or a meter everyone is paying their fair shares to finance the network,” Whitton said. Unlike other ISPs, Verizon doesn’t view heavy bandwidth users as hogs, but it does view them as potentially high-end customers.

Yet Verizon already does charge users a fair share to finance their network, based on the speed tier that customer chooses.  Those high-end customers are already paying Verizon premium prices for the fastest available speeds on Verizon’s fiber optic system.  Verizon’s ability to recoup their investment becomes easier and easier as costs decline to construct the fiber optic systems that will protect Verizon’s viability for decades to come, unlike those traditional phone companies sticking with copper wire lines until the last customer out the door turns the lights out for good.  Verizon’s average revenue per subscriber has never been higher with its ability to market video programming, speeds that make most cable operators blush, and an infinitely more reliable telephone network, all on one bill.  That helps achieve subscriber loyalty, particularly when offering service that keeps customers happy.

Creating Internet Overcharging schemes for your broadband service simply to monetize consumption does not keep customers happy.  Verizon sees the cream rising to the top — charging broadband enthusiasts more while promising nothing for customers who use the service less.  With average consumption per broadband user rising, there’s going to be a lot more cream to skim, charging an increasing number of customers more money for the exact same level of service.

No consumption billing scheme to date has ever provided customers with a “fair share” system, because none of them result in no charge for no consumption or charge a flat fee per gigabyte.  Instead, customers are allocated a pre-determined allowance for usage, charged whether they use it or not.  If they exceed it, punishing overlimit fees are always the result, unless a provider takes another step towards monetizing broadband by inventing overpriced “insurance plans” to protect consumers from overage fees.  The cost of delivering that data is already built-in to the price of today’s broadband plans, and those costs continue to decline.

Higginbotham adds another factor in the equation: with insufficient competition, those “fair share” schemes can inflate prices and lower allowances at a whim, as most customers lack a wide variety of competitors to choose from, which could help keep the greed factor in check.

Most places have two providers that offer slightly different sets of services and plans, making it hard to compare prices. I don’t mind paying more for a better network (I do so for my cell phone), but most consumers lack that option when it comes to wired access. Comcast—which competes against Verizon in about 12% of its footprint—is rolling out faster broadband to ensure that customers don’t leave the cable provider for Verizon’s fiber. But in other areas of the country, such as here in Austin, Tex., folks must choose between DSL (with some U-verse) and cable that hasn’t been upgraded to the faster DOCSIS 3.0 speeds.

Austin was one of the test markets for Time Warner Cable’s reviled “consumption billing experiment” this past April.  In other test cities, it’s more of the same.  In Rochester, New York broadband service is realistically available from two major players — Time Warner Cable and Frontier Communications.  The former has apparently passed over Rochester for DOCSIS 3 upgrades because the cable operator sees little need to upgrade service in an area whose only primary competitor believes DSL service is good enough, one that has stubbornly kept an Acceptable Use Policy defining an appropriate amount of usage at a piddly five gigabytes per month, and thinks fiber is for breakfast cereals, not for Flower City residents.

Verizon’s words help call out the fiction that some providers have used to peddle Internet Overcharging schemes on their customers.  It’s not about “fairness,” it’s not about “exafloods and Internet brownouts,” nor is it about “expanding networks.”  It’s about profit, pure and simple.  When you have a duopoly in place for broadband and almost no regulation governing that service, the sky is the limit for price increases and limits on usage.

Verizon’s Executive Director of Access Technologies Brian Whitton speaks about the future of telecommunication delivery technologies with Kimberlie Dykeman of Web2point0.tv at The Future of Television East conference in New York (February 25, 2009 – 11 minutes)

For years cable subscribers have lamented the “all or nothing” approach to cable packages.  Choosing only the channels you want to watch, and pay for, is out of the question.  But as the economic downturn drags on, and more consumers drop their cable service, Comcast has continued experimenting with “economy packages” consisting of fewer channels at a lower price.

First appearing a year ago in cities like Hartford, the reduced channel lineup works fine for many consumers who don’t watch sports networks or need access to niche networks.

For customers in the Twin Cities of Minneapolis and St. Paul, Comcast’s $29.99 Digital Economy package ($10 more if you do not subscribe to phone or broadband service) offers more than just the local stations in the broadcast basic package, but fewer channels than Comcast’s traditional standard Digital Starter tier, priced at $57.50.

Digital Economy includes all of the local television stations in the area, plus 20 mainstream basic cable channels familiar to any cable subscriber, including A&E, Cartoon Network, CNN, Discovery, Disney, Food Network, Fox News, Hallmark, History, Lifetime, USA and the Weather Channel, among others.

The channel selection trends towards being attractive to older subscribers, but hopes to be attractive to families as well.

It’s “educational, family-oriented channels,” Nick Kozel, Comcast’s vice president of marketing and sales in the Twin Cities told the Minneapolis Star-Tribune.

“This particular customer group typically likes them all, so what we’ve done is tailored what’s available to what a portion of the population really likes,” Kozel said.

The new package will be available in the Twin Cities market starting December 16 and includes one digital receiver and remote control.

Still, Twin Cities residents hope for the day when they can choose exactly the channels they want.

“Price each channel and let us pick the channels we want. These tiers are a joke to stick us with 50 channels we don’t want,” writes Derek.

“Having to buy a “package” is not consumer friendly. We want to choose and pay for only the channels that we watch, not the other 200 that are bundled in,” adds Clint.

A Comcast subscriber explains the Digital Economy Package (3 minutes)

AT&T Mobility wanted Verizon Wireless to stop showing ads that call out the differences between the two wireless competitors’ national 3G networks.  When Verizon didn’t, AT&T sued.  This week Verizon Wireless doubles down with three new holiday season ads that are guaranteed to enrage AT&T even further.

Anyone who has seen a Rankin/Bass holiday special will instantly recognize at least one of the ads is a play on the Island of Misfit Toys, seen in the 1964 holiday classic Rudolph, the Red-Nosed Reindeer.

Verizon Wireless – “The Island of Misfit Toys” (30 seconds)

AT&T accuses Verizon Wireless of misrepresenting its national data coverage by showing non-3G areas in white, a color AT&T says traditionally represents no service at all.  AT&T says its wireless data network, in its entirety, is more expansive than Verizon’s.  Verizon counters its ads only compare 3G coverage, and clearly label the maps as such, including a fine print disclaimer indicating “voice and data services available outside 3G coverage area.”

AT&T further argues watching frustrated consumers shaking their phones or sitting alone because they were unable to meet up with their friends would suggest to a casual viewer they weren’t able to access any service.

Verizon Wireless – “Blue Christmas” is sure to draw the ire of AT&T as a frustrated father visibly shakes his iPhone and never seems to be able to use it. (30 seconds)

Verizon Wireless’ attorneys officially responded to the AT&T request for a temporary restraining order to pull the ads off the air with a direct opening: “AT&T did not file this lawsuit because Verizon’s ‘There’s A Map For That’ advertisements are untrue; AT&T sued because Verizon’s ads are true and the truth hurts.”

The attorneys argue, “Remarkably, AT&T admits that the 3G coverage maps — the one thing that is common to all five ads — are accurate and that the ads’ express statement that Verizon has ’5X More 3G Coverage’ than AT&T is true.”

AT&T has been one of the loudest voices in this advertising battle, spending many millions of dollars to market its 3G network as the “Nation’s Fastest 3G Network” and, with its exclusive partner Apple, naming the latest iPhone (only available on AT&T’s network) the “iPhone 3GS.”

The stark truth, as revealed by the concededly accurate coverage maps in Verizon’s advertising, is that the geographic reach of AT&T’s 3G network is far less extensive than AT&T would have the public believe — and far less extensive than Verizon’s 3G network. Consumers who are interested in smartphones have a strong interest in knowing the comparative 3G coverage offered by Verizon and AT&T.  Cutting off the free flow of information about Verizon’s more extensive 3G coverage would harm consumers in a way that could not be redressed.  And because injury to First Amendment rights is by definition irreparable, suppressing Verizon’s speech on an “emergency” basis before a definitive and fair adjudication would irreparably injure Verizon and its goodwill in addition to costing Verizon customers. Any harm to AT&T, in contrast, is merely speculative.

In the final analysis, AT&T seeks emergency relief because Verizon’s side-by-side, apples-to-apples comparison of its own 3G coverage with AT&T’s confirms what the marketplace has been saying for months: AT&T failed to invest adequately in the necessary infrastructure to expand its 3G coverage to support its growth in smartphone business, and the usefulness of its service to smartphone users has suffered accordingly. AT&T may not like the message that the ads send, but this Court should reject its efforts to silence the messenger.

Verizon Wireless – “Elves” includes the line “good luck browsing the web with that one.” (30 seconds)

AT&T has gone all out to find confused consumers to back up their request for a temporary restraining order, running a survey asking ordinary cell phone users what they thought Verizon Wireless’ ads meant.  But Verizon Wireless answers the survey wasn’t limited to smartphone customers, who are already well aware of the differences between 3G and older, slower speed data networks, and for that reason the results are invalid.

Verizon Wireless says it will continue the aggressive campaign beyond the all-important holiday season, when cell phone handset sales are at some of their highest traditional levels.

Byron L. Harris heads the Consumer Advocate Division of the West Virginia Public Service Commission

Strong opposition to the proposed spinoff of Verizon service in West Virginia to Frontier Communications erupted Monday as the state Public Service Commission (PUC) published a flurry of written testimony filed with the state agency.

Some of the strongest criticism of the deal came from the state’s Consumer Advocate (CAD), an independent division of the PSC that represents residential utility customers.  Division director Byron Harris testified the deal carried “too many risks” for the state, and suggested Frontier failed to do its homework before considering the implications of the deal for nearly the entire state’s telephone system.  Harris added residents faced higher phone bills, early termination fees, little improvement in service, and was highly skeptical of Frontier’s promises to expand broadband service in the state, suggesting the company will not be in a financial position to offer acceptable “plain old telephone service,” much less broadband.

Harris testimony called on the Commission to reject the deal:

The proposed transaction poses too many risks for retail telephone customers in West Virginia from both a financial and an operational standpoint. The proposed transaction also poses too many risks for Verizon-WV’s wholesale customers and, ultimately, the tens of thousands of West Virginians served by these entities.

In his testimony on behalf of the CAD, Mr. Roycroft [one of two expert consultants hired to analyze the proposed sale] explains the operational difficulties that Frontier will face in assimilating the Spinco properties and operating systems. As Mr. Roycroft makes clear, the operational difficulties associated with a transaction as large as the one proposed are exacerbated by the fact that the proposed transaction – from an operational standpoint – actually involves two mergers in one:

1. The acquisition of the legacy Bell Atlantic network and OSS in West Virginia, and
2. The acquisition of the old GTE network and systems in 13 other states.

Mr. Roycroft details the multitude of risks that the proposed transaction presents for retail and wholesale telephone customers in West Virginia. Not only do customers face service and service quality risks, but they also face the risk of higher rates and/or other adverse terms and conditions of service such as early termination fees.

Mr. Hill points out, in his testimony, the many unrealistically optimistic financial projections Frontier makes in support of the proposed transaction. As Mr. Hill points out, Frontier’s projections rely too much on financial information that has been provided by the seller, Verizon, without independently verifying Verizon’s numbers. Frontier’s projections similarly rely on a number of assumptions about reducing access line loss, cutting operating expenses and capital expenditures, and realizing merger savings that would require Frontier to substantially reverse recent trends.

The fallout from the proposed merger not going well obviously affects retail and wholesale customers currently served by Verizon-WV and Frontier-WV as well. As discussed below, and in Mr. Roycroft’s testimony, Verizon-WV’s customers already have experienced sharp declines in their service quality, which is the predictable result of years of falling investment in the company’s telephone plant and workforce in West Virginia, as Verizon has focused its attention on other markets in other states and other service offerings, such as wireless service and video/Internet/telephone service provided via its FiOS offering (which is not offered in West Virginia).

The financial and operational risks associated with the proposed transaction jeopardize the combined company’s ability to maintain even current service quality in Verizon-WV’s service territory, let alone follow through on Verizon-WV’s obligation to improve that service quality going forward under the Plan.

Although the CAD obviously is (and has for some time been) concerned with the poor service quality currently provided to customers by Verizon-WV, the CAD believes that service is likely to get even worse under Frontier’s ownership. The proposed transaction will result in a post-closing Frontier that will not have the financial resources to be able to improve service quality for “plain old telephone service” – as voice-grade traditional telephone service is often called – in Verizon-WV’s service territory, much less to deploy broadband to the extent suggested in Frontier’s direct testimony.

Harris likened the deal to Frontier buying a used car from Verizon without knowing what’s under the hood.

“Frontier has essentially agreed to purchase a used car without first having the car examined by a mechanic. Without a thorough investigation of Verizon-WV’s plant, Frontier has no way of knowing whether its buying a pre-owned car that has had regular oil changes and proper tune-ups, or whether it is buying a clunker with a new paint job and a blown transmission. If Verizon-WV’s network has not been properly maintained (as the evidence seems to suggest), just like a car that hasn’t been properly maintained, getting it back to serviceable condition will be a very expensive proposition,” Harris testified.

Harris gave five specific reasons why the deal was bad for West Virginia:

First, Frontier has not done any in-depth analysis of the quality of the Spinco facilities that it is acquiring. This lack of analysis is disturbing on its face, as it would seem to be a fundamental area of inquiry for any prospective buyer. But the importance of this lack of meaningful review is magnified in West Virginia by the fact that Frontier knows, or reasonably should know, that Verizon-WV’s outside plant facilities in West Virginia are not in good shape. The Commission is well aware of the significant decline in service that Verizon- WV’s customers have experienced over the last several years. This decline is documented in the public record (in both the informal complaint records maintained by the Commission’s Staff, and in the record in proceedings related to Verizon-WV’s service quality docketed in the last few years). That record should have triggered a much more searching analysis by Frontier. This lack of analysis also impacts the overly optimistic assumptions that Frontier has used in its financial analysis of the transaction.

Second, Frontier’s overly optimistic financial projections increase the risk that the post-merger company will not be able to remedy Verizon-WV’s current poor service quality or to provide its promised broadband deployment. Verizon is obviously a larger and more financially sound company than Frontier. For a company such as Frontier which historically pays out greater dividends than its net income, the risk that the optimistic financial projections will not transpire is magnified.

Third, as of October 14, 2009, Frontier still had not determined how it will handle the additional call center volumes that will occur when the company acquires access lines in West Virginia.  Obviously, the proposed transaction would adversely affect the public if it is approved without a concrete plan to handle service calls from current Verizon-WV customers.

Fourth, similarly, no concrete plan has been put forth by Verizon for serving customers in West Virginia who are currently served out of central offices in Maryland. Again, the proposed transaction would adversely affect the public if it is approved without a concrete plan to serve Verizon-WV customers who are currently served from central offices in Maryland.

Fifth, current Verizon-WV retail customers face the prospect of increased rates and/or early termination fees as a result of having their current package or bundle service migrated to a similar package or bundle offered by Frontier. In discovery, Frontier has to date refused to identify the packages that will be offered to replace current Verizon-WV packages or to state at what price the packages will be offered to such customers. Verizon- WV customers with bundles that include Verizon broadband service also appear to likely face significant early termination fees of at least $120 if they elect not to transition or migrate to Frontier’s service after closing. This likelihood appears even greater when the companies’ obtuse response on this subject is considered. When the CAD asked whether Verizon-WV customers who elected not to remain with Frontier post-closing, would be charged any early termination fees, the companies merely stated that they will “honor the terms of their contracts with customers.” Obviously, “honoring” the terms of a contract that includes an early termination fee could very well mean enforcing that provision of the service agreement.

Hundreds of New York state residents were unfairly charged early termination fees that eventually brought Frontier to the attention of the New York Attorney General’s office, which obtained relief in the form of full refunds for affected New York residents.

Ironically, even though Verizon may seek to exit West Virginia’s landline telephone business, the company will continue to exist as a competitive player in the state — through Verizon Wireless, its mobile telephone division.  Verizon Wireless sent letters to customers urging them to terminate their home phone lines.  That will spell additional competition for Frontier Communications, as Stephen Hill testified, on behalf of the Consumer Advocate Division:

“Simplify your life and your budget by cutting the cord on your home phone today.”  It is reasonable to believe that such a letter coming from the company that had been a customer’s land-line phone service provider urging them to end that type of service and return to their former provider’s wireless service, would have an impact on Frontier’s ability to maintain that customer. The presentations to Frontier’s board of directors regarding the merger do not discuss potential competition from Verizon.

Perhaps the more troubling aspect of Verizon as a formidable competitor, however, is that, under the current post-merger plan, Verizon will continue to operate the billing and back-office functions of most of the local exchange operations sold to Frontier. Under such circumstances, Verizon becomes both a business partner and a competitor of Frontier-a situation that would put Verizon in an even greater competitive position than it would be otherwise (Le., if it weren’t also leasing operating systems to Frontier). Therefore, it is quite possible that, due to competition-in which Verizon is likely to play an important role-the reduction in the rate of revenue decline forecast for the future may not be realized. Instead, the rate of access line loss may accelerate from historical conditions, making the fbture financial picture for a combined Frontier/Spinco more tenuous than now forecast.

Strong opposition also came from other providers, some of whom who may be affected by the sale through wholesale agreements currently in place with Verizon, as well as from the Communications Workers of America (CWA).

Susan Baldwin, who served as Director of Telecommunications for the Massachusetts Dept. of Public Utilities, submitted testimony on behalf of CWA.  In her testimony she stated, “If the transaction goes awry, consumers will bear the consequences….Even if the transaction does not go awry, it will adversely affect consumers because Frontier’s financial constraints will prevent it from investing in the WV telecommunications infrastructure.” Baldwin strongly urged rejection of the proposed deal.

David Armentrout, on behalf of FiberNet stated, “Frontier lacks the requisite resources, experience, and incentive to comply with wholesale obligations it will take on …in West Virginia.”

Some companies waived their right to file direct testimony but asserted their right, along with the parties who did file today, to file rebuttal testimony in December.

Coming up… The truth about Frontier’s DSL products, network capacity, and why their 5GB Acceptable Use Limit is part of official testimony calling on the Public Service Commission of West Virginia to just say no to Frontier Communications.

Are you a cable or telephone company scared of the costs associated with tearing out existing underground or overhead copper-based wiring to upgrade to fiber optics?

Why bother going through all of that effort when you can just yank the old copper wire out and push state-of-the-art fiber cable in.

Buckeye CableSystem, a Toledo, Ohio cable operator intends to do just that, using a process invented by an Austrian company, Kabel-X.

Buckeye will inject a Kabel-X supplied fluid between the outer jacket and the inner core of the cable.  This allows the cable company to pull the copper center conductor and the insulating material right out of the center of the cable, leaving plenty of space to insert new fiber optic cables, without having to tear up streets, get permission from local zoning authorities to string new cable, or go through the expense of completely replacing it.

Better known in Europe, where the process has been used throughout the continent, Kabel-X is now making inroads in North America with small scale projects with companies like Buckeye.  Kabel-X has been particularly attractive in eastern Europe, where the process is more affordable than complete cable replacement.  With more limited budgets, re-using existing cable already in place provides an attractive alternative.

Buckeye CableSystem in Toledo

The company claims it can replace up to 1000 feet of existing coaxial cable with fiber in as little as three hours.

Buckeye intends to experiment with the technology in a Toledo subdivision to see how well it works.

The one major downside to using Kabel-X is that service is typically interrupted while the cable work is being done.  Should something go wrong, customers could be left entirely without service, a prospect that mandates small scale experiments to train cable engineering crews to work speedily and efficiently, and prove the technology can work well in a variety of conditions.

“We see the Kabel-X technology as an innovative tool that will allow us to cost effectively deploy a fiber-to-the-home architecture in areas currently served by a traditional hybrid fiber coax network,” Buckeye Cablevision chief technology officer Joe Jensen said.

Buckeye’s efforts to upgrade to true fiber-to-the-home service may come as a response to AT&T’s U-verse service, which began competing for Toledo customers about a year ago.  Buckeye has 150,000 subscribers in the Toledo area, and remains the largest pay television operator, but U-verse is positioned to steal away some of those customers over time.

Buckeye’s cable broadband service, bex-Buckeye Express, offers customers up to 20Mbps service, if you opt to subscribe to other Buckeye services.

The company’s Acceptable Use Policy indicates they do not impose limits on usage at this time, but curiously do admit to throttling the speed of peer-to-peer traffic and dynamically reducing speeds for customers who are considered “high bandwidth users” during peak demand periods.  Both of these seemed to get Comcast into hot water with the Federal Communications Commission.

BUCKEYE EXPRESS™ HIGH SPEED INTERNET SERVICE ACCEPTABLE USE POLICY

Buckeye uses reasonable network management techniques to improve overall network performance and reserves the right to employ additional techniques as necessary or desirable. Some applications, including certain peer-to-peer applications, can consume inordinately high amounts of bandwidth on the network and degrade network performance. Buckeye’s current network management techniques include:

Speed Caps – limiting the speeds that a modem can transmit or receive data. Buckeye may lower the transmission rate or reception rate of high bandwidth users during times of high network demand. This may slow the transmission or reception rate for affected modems.

Connection Limits – limiting the number of simultaneous connections for any modem during an online session. With a typical user having a dozen or so simultaneous connections for routine use, this limit provides a means of identifying and hopefully thwarting malicious attempts to harm the network or other users. This limit is currently set well above the number of connections used by typical user in a session.

Application-based Rate Limiting– limiting transmission speed of certain high bandwidth applications. Some applications, typically peer-to-peer applications, can consume large amounts of bandwidth, often without the knowledge of the user/customer. By limiting the portion of the network capacity available for these applications during periods of high traffic, Buckeye is able to improve the overall performance of the network for all users. Transmission of traffic subject to this technique may be slower during periods of high network usage.

Watch the Kabel-X process at work in this company-produced demonstration video. (7 minutes)