Louisiana Public Service Commission Refuses to Vote Itself Authority to Fine AT&T for Lousy Service

Despite hundreds of consumer complaints from residents in and around Baton Rouge, the Louisiana Public Service Commission has refused to vote itself the authority to threaten AT&T with a fine up to $175,000 for poor service.

Ignoring an agreement by AT&T to adhere to minimum service standards in return for permission to acquire BellSouth Corporation in 2006, the Commission oddly decided not to enforce those conditions for the protection of AT&T customers.  On Wednesday, in a 3-2 vote, the PSC instead decided to “study” the matter and to further consider whether or not it should impose the same minimum service standards on all of Louisiana’s phone companies.

Campbell voted for the authority to fine AT&T. He serves District 5 in northern Louisiana

Commissioner Foster Campbell, of Bossier Parish in northern Louisiana, was stunned by the vote’s results.

“You’re telling AT&T that no matter what they do, no matter how bad their service, we’re not going to do anything?” he asked.

Campbell told his fellow Commissioners he’s worn out after taking large numbers of calls from upset residents in northern Louisiana.

Field also voted for the measure. He serves District 2 in southern-central Louisiana

This is the second time the PSC refused to fine AT&T and instead “study” the matter.  Meanwhile, customer complaints from the Baton Rouge area continue to pour into the PSC offices.

Commissioner Jimmy Field, who represents the Baton Rouge area, told AP his office had been swarmed with consumers complaining about the length of time to get service installed and outages lasting more than 24 hours. Field wanted the PSC to hang the fine over AT&T’s head again.

Complaints against AT&T in Louisiana also involve lengthy waits for repair call appointments, delays in getting new lines installed, missed appointments, and extended service outages.

In just four months last summer, the Commission confirmed 435 of the 778 complaints lodged across the state against AT&T.

Apparently if the problems don’t impact the residents you represent, there isn’t a problem.

The three commissioners that voted against the proposal to potentially fine AT&T said as much.

Skrmetta was the ringleader of the three opposed to potentially fining AT&T. He serves District 1 in east Louisiana

PSC Commissioners Eric Skrmetta, of Metairie, Lambert Boissiere III, of New Orleans, and Clyde Holloway, of Forest Hill said it wasn’t fair to single out just one company.

Skrmetta went further and said he hadn’t seen many complaints in his district, north of Lake Pontchartrain.  But he had received complaints about some of AT&T’s competitors.

Boissiere voted against the measure. He represents District 3 in central Louisiana

Boissiere, despite voting against the proposal, delivered a verbal spanking to the AT&T representative on hand.

“I don’t like your methods. I don’t like your style. I understand where my fellow commissioners are coming from,” Boissiere said.

Debbie Canale, the executive director for regulation for AT&T Louisiana, wasn’t much impressed with Boissiere’s comments.

“Our customers vote with their money and would do business with competitors, if they were unhappy with AT&T,” Canale offered.

Our Take

The three commissioners who voted against giving themselves the power to make their regulatory authority count don’t belong on any Public Service Commission.  Any member of a review board should be concerned first and foremost with the interests of the residents they represent.  The three Louisiana commissioners who voted against the proposal failed to do that.  They should be removed immediately.

The only way to impress telecommunications companies under your review is to have the power to make them pay attention to your rulings.  Stiff fines for repeated violations (and 435 in just four months is an incredible number) will make any company sit up, take notice and fix problems.

Without it, verbal scoldings are little more than lip service to a provider that can afford to be arrogant, especially in rural Louisiana where competitive choice is hardly bountiful.

Canale’s response to the Commission boils down to, “if you don’t like our service, leave.”  If only every Louisiana resident could choose another landline provider if they wanted.

Holloway, the third "no" vote, represents District 4 in western Louisiana

Ignoring a company’s problems in one region of the state virtually guarantees those problems will eventually visit another.  It is short-sighted and inexcusable to ignore hundreds of valid complaints,  condemning residents to more of the same in the future.  Voting (for a second time) to “study” the issue is an insult to residents and little more than a stall tactic.

The Commission’s suggestion it wants to impose regulatory fairness comes despite a clear agreement, less than four years old, that AT&T signed onto as part of its buyout of BellSouth.  It says AT&T will commit to certain standards of service in return for regulatory approval of the merger.  AT&T already sought to renege on that agreement in mid-2009 when it asked the Commission to suspend fines as part of their “study” about regulatory policies across the state.

So much for that hard-fought consumer protection deal.  Evidently, what AT&T agrees to one year is fodder for their lobbyists the next.  If AT&T wants changes, can consumers demand some changes of their own that assure this company will provide quality service?

As usual, AT&T’s regulatory affairs never give consumers a good deal.  For 435 residents of Louisiana, it also gave them no dial tone and a lengthy wait to get it back.

At for Commissioners Skrmetta, Boissiere and Holloway, the only question that should be on the table is whether they represent residents or AT&T Louisiana.

That is something worthy of careful study.

Louisiana's Public Service Commission is made up of five commissioners, each with their own district to represent.

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Girl Faces Reconstructive Surgery After Tangling Up in Unattended Cox Cable Wiring

Phillip Dampier March 12, 2010 Cox, Public Policy & Gov't, Video Comments Off

A Norfolk, Virginia girl faces serious reconstructive surgery after running into an unattended cable line the city determined to be the property of Cox Cable.

Laurel Pont says her grandchildren were on their bicycles in May of 2008 when Willow got caught in a spiraling cable stretched across several lawns and driveways in an alley near her home.  The cable had been left there, unattended, for at least seven months.

Bill Pont noted, “This wasn’t just a wire, this was a coil. It was like a giant slinky laying here.”

Both of Font’s grandchildren were injured from the encounter.  The result for Font’s granddaughter was a serious facial injury.

Laurel Pont told WAVY-TV the little girl faces reconstructive surgery after she nearly severed her top lip from her face.

“She doesn’t smile. She used to have this huge smile, big toothy grin,” Pont said.

The matter is now in the courts, and that prompted a major dispute between city officials and Cox Cable, both named as defendants, over who is responsible for the cable.

“We originally sued Cox and the City of Norfolk. The City of Norfolk has filed what they call a cross claim against Cox. Cox then filed what they call a 3rd party action [against a subcontractor],” said Joseph Young, the Font’s attorney.

The Font’s turned to WAVY-TV’s 10 On Your Side in hopes of getting the matter resolved and to also expose the danger of unattended utility cables.  The Font family is also working with legislators to create a law that would limit the amount of time a hazard can remain in a neighborhood.

http://www.phillipdampier.com/video/WAVY Norfolk City -- Cable Company Dispute Over Girl's Scarring Injury 2-22-10.flv

WAVY-TV’s ’10 On Your Side’ covers the story of a girl seriously injured because of unattended cable television wiring. (5 minutes)

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New Mexico Rural Broadband Gets Boost from Federal Stimulus Program

Phillip Dampier March 12, 2010 Public Policy & Gov't, Rural Broadband, Video Comments Off

Stimulus funds are helping bridge the digital divide by bringing high speed Internet to rural areas in southeastern New Mexico.

Thursday, Rep. Ben Ray Luján applauded investments in rural broadband in New Mexico made through the American Recovery and Reinvestment Act.

“Broadband technology connects communities, helps businesses grow, and provides students with the opportunity to learn new skills. As we expand broadband technology, we must ensure that our rural communities have access,” said Luján. “It is encouraging that the Recovery Act is making this important investment in broadband technology, especially in our rural and tribal communities.”

Penasco Valley Telecommunications in Artesia has been awarded $10 million in federal stimulus money to string miles of fiber optic cable to rural towns like Hondo, Mayhill and Hope.

The fiber optic cable will be a vital link for the area’s homes, businesses, schools and emergency services.

“It’s important for the rural parts to have access to the Internet, otherwise the digital divide they talk about will just get wider,” said Glenn Lovelace of Penasco Valley Telecommunications.

The project is scheduled for completion some time next year.

Since the American Recovery and Reinvestment Act of 2009 began distributing stimulus funds, it has provided roughly $250 million in funding for projects and programs in New Mexico.

The two New Mexico broadband projects that will receive funding:

Pueblo de San Ildefonso: TewaCom Broadband Initiative (TBI), Phase 1-Upper Rio Grande Valley Project; $632,225 loan and $632,225 grant. The funding will enable the Pueblo to expand service to 2,405 households.

Penasco Valley Telephone Cooperative Inc.: The Penasco Valley Telephone (PVT) Incumbent Local Exchange Carrier (ILEC) Project; $4,818,607 loan and $4,770,660 grant. The funding will provide high-speed broadband to unserved areas in the ILEC territory through fiber and wireless technology.

http://www.phillipdampier.com/video/KOB Albuquerque High-speed cable slated for southeast New Mexico 3-10-10.flv

KOB-TV in Albuquerque reports the high speed broadband projects made possible from stimulus funding resemble the kind of public works projects that were common during the Great Depression. (2 minutes)

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Biggest Problem With South Pacific Broadband: “Restrictive Data Caps” — New Fiber Project Helps Eliminate Them

Phillip Dampier March 11, 2010 Broadband Speed, Competition, Internet Overcharging Comments Off

Flag of New Zealand

Despite broadband provider propaganda designed to convince Americans restrictions on broadband usage were “commonplace” and well tolerated overseas, a group of New Zealand and Australian broadband entrepreneurs propose to spend just under $900NZ million to build new fiber capacity to help eliminate them once and for all.

A team of businessmen from the South Pacific today announced they are part of “an early stage” venture to construct a brand new underseas fiber optic cable to connect Australia and New Zealand with the United States, providing five times the capacity of existing service provided by the Southern Cross system.

The new group, Pacific Fibre, went public today and is talking with potential partners about the plan to construct a 13,000 kilometer cable by 2013.

Mark Rushworth, former Vodafone chief marketing officer, told TV New Zealand a full 90 percent of New Zealand Internet traffic is bound for the United States.

“It is using the most direct route. It is one hop from New Zealand to the US, which from a technical perspective is very important because it means it is a lower latency cable, that is, it is faster than other cables,” he said.

Flag of Australia

The primary impetus for the project was the common practice in New Zealand and Australia to limit customers’ usage of broadband service with Internet Overcharging schemes like usage-based billing or restrictive data caps which can throttle speeds just above dial-up for customers for weeks, if they exceed their usage allowance.

Rushworth

Private providers have lived happily on the revenue earned from such schemes and have done little to relax usage limits on their customers, so Pacific Fibre decided to undertake a game-changing new fiber cable themselves to drive prices down and eliminate the caps.

“We desperately need a cable that is not purely based on profit maximization, but on delivering unconstrained international bandwidth to everybody, and so we’ve decided to see whether we can do it ourselves,” said partner Sam Morgan.

“We hope to bring in extra capacity at a low price, which our carriers and ISP customers can end up passing on to their customers,” Rushworth said.

“We all know that in any market as soon as you introduce competition prices tend to drop and volume goes up,” he told TVNZ.

The current proposed cable configuration would have two fiber pairs with 64 wavelengths (lambdas) each at 40 gigabits per second per lambda. The maximum lit capacity initially would be 5.12 terabits per second, but would be upgradeable to over 12 terabits per second as emerging technology became a reality.

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Upstate/Downstate: More Cities in New York Getting Time Warner Cable Wideband Service

Phillip Dampier March 11, 2010 Broadband Speed, Competition, Time Warner Cable 2 Comments

Although residents of Rochester will have to wait, other cities in upstate and downstate New York are now getting Time Warner Cable’s Wideband broadband service, which provides faster upstream and downstream speeds thanks to DOCSIS 3 service upgrades.

Time Warner in Buffalo yesterday signed its first Wideband customer, according to Broadband Reports.

The Hudson Valley will be the next:

  • Walden Available March 30, 2010
  • Wurstsboro Available March 30, 2010
  • Rhinebeck/Saugerties Available March 30, 2010
  • Poughkeepsie Available March 30, 2010
  • Port Ewen/Kingston Available March 30, 2010
  • Liberty/Monticello Available March 30, 2010

Time Warner Cable is deploying Wideband first in communities where they face competition from Verizon FiOS or AT&T U-verse.  Communities like Rochester, which face only token competition from slower-speed DSL service, are pushed way back on the upgrade list.

Customers in Albany, Buffalo and Syracuse who live near, but not in a FiOS-upgraded community, will also benefit from the DOCSIS 3 upgraded-Wideband service.

Two types of Wideband service are commonly available according to BR:

  • 30 Mbps downstream 5 Mbps upstream tier that costs $25 over Time Warner Cable’s standard Road Runner plan (which can vary in price and speed by market depending on competition).
  • 50 Mbps downstream 5 Mbps upstream tier for $99 a month.
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Judge: Illinois Verizon-Frontier Sale Should Be Disconnected — ‘Deal Will Diminish Service to Illinois Customers’

Phillip Dampier March 11, 2010 Frontier, Public Policy & Gov't, Verizon 3 Comments

An administrative law judge reviewing the proposed sale of Verizon landlines to Frontier Communications has formally recommended the Illinois Commerce Commission (ICC) reject the deal.

Allowing Verizon to sell 600,000 Illinois phone lines, mostly in less populated areas of the state, would likely harm the quality of service customers receive from their landline provider according to Judge Lisa Tapia.

Tapia was given the responsibility to review the transaction’s merits before the deal moves before the ICC for final consideration.  Her 46-page report concludes that Frontier’s existing Illinois customers would likely be harmed, along with existing Verizon customers, because of the enormous debt Frontier Communications will take on as part of the deal.  Tapia writes the economic impact of the deal “will diminish Frontier’s ability to perform its duties to provide adequate, reliable, efficient, safe and least-cost public utility service.”

According to Staff witness Mr. McClerren, both Frontier Illinois operating ILECs (local phone companies) and Verizon have, in recent years, had some difficulty meeting the minimum key standards contained in Part 730. The key Part 730 standards are Toll & Assistance Operator Answer Time, Directory Assistance Operator Answer Time, Repair Office Answer Time, Business Office Answer Time, Service Installations, Out of Service for Less Than 24 Hours, and Trouble Reports.

Ms. McClerren characterized the performance of the nine Frontier Illinois operating ILECs as poor relative to the Repair Office Answer Time and Out of Service for Less Than 24 Hours standards and unacceptable relative to the Business Office Answer Time standard. Mr. McClerren concluded that given Frontier’s poorer performance relative to Verizon’s performance on Repair Office Answer Time, Business Office Answer Time, and Out of Service for Less Than 24 Hours , service quality would likely decline in the current Verizon North and Verizon South territories if the proposed reorganization is allowed to occur. Mr. McClerren further stated that because Frontier had continuously failed to satisfy the Business Office Answer Time, Staff expressed to Frontier representatives that it was prepared to initiate a hearing under Section 730.120 of the Act for the purpose of imposing penalties.

The evidence shows there is a significant risk that problems could occur if the transition is made too prematurely so as to create a potential for harm to Illinois customers. When weighed against the many risks of the Transaction, including, among others, the risk of systems integration, the purported benefits of the Transaction do not justify approval.

Of particular concern to Judge Tapia is the impact on Frontier’s finances and operating ability to take on more than 600,000 new customers in Illinois.  Despite company promises to the contrary, Tapia’s report notes we’ve been down this road before, particularly with FairPoint Communications, which went bankrupt late last year.

The evidence shows there is a significant risk that problems could occur if the transition is made too prematurely so as to create a potential for harm to Illinois customers. When weighed against the many risks of the Transaction, including, among others, the risk of systems integration, the purported benefits of the Transaction do not justify approval.

[...]

For instance, Frontier’s total Illinois access lines would be increasing from 97,000 to over 670,000 lines. Frontier would also be almost tripling its size and will be burdened with an enormous amount of approximately $3.3 billion in debt. The financial pressure along with more wirelines to handle leads the Commission to conclude that service quality will certainly be diminished. The ultimate consequences of diminished quality service will be borne by Illinois customers.

What about broadband and Frontier’s promises to expand it into rural communities across Illinois?  Judge Tapia’s report questions whether Frontier will do any better than Verizon did.

The record also does not support a finding that Frontier will be any more effective than Verizon in expanding the scope and quality of broadband services in the Illinois service areas it proposes to acquire from Verizon. To the contrary, the evidence shows that it is very unlikely that a smaller, less experienced operator would be able to support such an investment.

The findings also call attention to Frontier’s practice of paying out more in dividends to shareholders than the company actually earns from customers.  The International Brotherhood of Electrical Workers (IBEW), which has consistently argued against Verizon spinoffs, says no company can expect to succeed by paying out more than they earn just to keep a favorable stock price.  The IBEW has correctly predicted the outcome of other Verizon spinoffs, and warned the Verizon-Frontier deal is simply more of the same.

IBEW pointed to a 2007 Montana Public Service Commission (“PSC”) decision in which the PSC rejected a proposed merger and acquisition because “In normal utility operations, retained earnings provide a vital source of financial strength for capital investment and as reserves that are available during unexpected financial strains.  Regularly paying out dividends in excess of net earnings by a utility is inappropriate and risky because having insufficient reserves on hand could adversely affect the utility’s ability to provide adequate service.”

IBEW stated that the Montana PSC’s findings apply equally to Frontier. The IBEW endorsed the reasoning of the Montana PSC and reached the same conclusion about Frontier.

According to IBEW, Frontier only has two or three more years before it will have paid out all of its retained earnings to stockholders, based on its performance in the first half of 2009. IBEW also stated that two Wall Street financial analysts have independently found that Frontier’s shareholders’ equity is likely to become negative in 2012 or 2013. After that, Frontier’s dividend would have to be reduced to no more than its net income – a likely dividend cut of 60% or more. IBEW argued that without this Transaction, Frontier’s business model will fail within two or three years. IBEW asserted that Frontier does not plan to change its approach to business. Frontier still plans to pay out more to shareholders than it earns in net income and that there is no scenario where Frontier plans to pay out less in dividends than it earns in net income during the 2010 to 2014 period examined.

The report agrees with the IBEW position:

Frontier’s risky business model is a concern. The Commission agrees with IBEW that in normal utility operations, retained earnings provide a vital source of financial strength for capital investment and as reserves that are available during unexpected financial strains. Regularly paying out dividends in excess of net earnings by a utility is inappropriate and risky because having insufficient reserves on hand could adversely affect the utility’s ability to provide adequate service. Based on the record, this has been Frontier’s business practice. However, Frontier testified that it has revised its dividend policy. According to Frontier, it currently pays an annual cash dividend of $1.00 per share of Frontier common stock. Frontier after the closing of the proposed Transaction, intends to change its dividend policy to pay an annual cash dividend of $0.75 per share of Frontier common stock, reducing its dividend by 25% – from $1.00 to $0.75 per share – effective with the close of the Transaction.

The Commission does not find Frontier’s assertion credible. Specifically, that it plans to revise its dividend policy (at the discretion of it Board of Directors) because of this proposed Transaction when this has been Frontier’s approach to business for years.

Hundreds of pages of comments from consumers and other interested parties have been recorded by the ICC, many in opposition to the proposed deal.  The ICC’s next step is to accept comments about the report, which have already been forthcoming.

McCarthy

Dan McCarthy, Chief Operating Officer of Frontier Communications was among the first.

“Today’s proposed order by an administrative law judge in Illinois ignores the numerous public interest benefits outlined in the complete record developed in the Frontier/Verizon transaction. This record fully addresses the issues raised by the ALJ. We are confident that once the full Illinois Commerce Commission reviews the record, they will vote to support the transaction,” McCarthy said in a prepared statement.

“Frontier has formally committed to expand broadband to 85 percent of the households in the Verizon Illinois service areas covered by the transaction and spend in excess of $40 million to accomplish this effort,” the statement says, further noting that the company already provides DSL broadband service to 90 percent of its existing footprint in the state.

The full ICC is expected to rule by the end of April.

Among the Illinois communities impacted by the transaction:

Chatham, Divernon, Elkhart, Illiopolis, Jacksonville, Lincoln, Loami, New Berlin, Pawnee, Pleasant Plains, Sherman, Virden, Waverly and Williamsville.

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[Update 2] Time Warner Cable: Major Road Runner/Digital Phone Outage in Northeastern U.S.

Phillip Dampier March 10, 2010 Time Warner Cable 11 Comments

A major service outage impacting Road Runner and Digital Phone service from Time Warner Cable began early this morning is ongoing.  Customers contacting Time Warner Cable in Maine, New York, and western Massachusetts are being told there is a service outage ongoing with both services, resulting in no dial tone and slow/no Internet service.

Presumably, there is a problem at the Regional Operations Center in Syracuse.

There is no estimated time for service restoration.

Cable television service is not affected.

[Update 2:00pm EST -- Time Warner Cable blamed the outage on a defective router, which we heard was in the Binghamton area.  Service was "restored" at 9:45am although we've noticed that meant they shifted traffic onto other regional networks and that was still causing some page loading problems until late in the morning.

The outage was acknowledged on Time Warner Cable's customer service lines in New York, Massachusetts, and Maine.  Rochester had the first recorded message up very early this morning, with the others coming by 8:45am.]

[Update 4:36pm EST -- Customers impacted by the outage can obtain one day of Road Runner service credit, but only if you call or write to ask.  You can use the online customer form on Time Warner Cable's website for your area or call your local customer service number.  The outage began around 5:20am this morning.]

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50/5 Mbps ‘Wideband’ Service Arrives in Dallas for Time Warner Cable Customers Later This Month

Phillip Dampier March 9, 2010 Broadband Speed, Competition, Time Warner Cable 2 Comments

Time Warner Cable customers with deep pockets and a need for speed will find Time Warner Cable’s new Wideband Internet service arriving in certain North Texas neighborhoods on or around March 19th.

Made possible by DOCSIS 3 upgrades, the new service will provide 50/5 Mbps service for as low as $99.99 per month.

As has been the case in other cities getting TWC’s Wideband service, self-install kits are not yet available and a formal service call is required.  You will also need a new DOCSIS 3-capable cable modem.

Interested customers in the Dallas area can call Time Warner Cable after March 19th at (972) 742-5892 to determine if service is available yet in your neighborhood.

Time Warner Cable competes with both AT&T and Verizon across its North Texas division.

AT&T U-verse maxes out at 24 Mbps currently, and although Verizon FiOS can match Time Warner Cable’s speed, the phone company’s current price is $40 higher for the service.

Customers who need this level of speed should call Verizon or Time Warner Cable and inquire about any promotional pricing that could lower your bill for several months.  In New York City, some customers received discounted Time Warner Cable Wideband service for six months.

Eventually, competition should result in lower prices for super fast broadband connections.  DOCSIS 3 upgrades offer a win-win for both customers and the cable company providing the service.  Increased capacity resolves neighborhood congestion issues and also permits higher speed, premium-priced tiers to deliver additional profits to providers.  In return, customers who need ultra-fast speeds get them, and are only to happy to pay for them, as long as they are not usage-capped.  Nothing destroys the value of premium-priced tiers better than unjustified usage limitations.

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Comcast Raising Prices… Again, But Their Usage Cap Remains Firmly In Place; 3.5 Percent Increase For Many

Comcast is back with another rate increase effective April 1st, amounting to 3.5 percent for many cable, broadband, and telephone customers.

Although prices vary depending on your specific service area, the range of the price increase is more consistent.

In southern New Jersey, for example, here is the breakdown — all prices are by the month:

  • Expanded/Standard service cable-TV tiers are increasing $2.  Expanded service customers could pay up to $50.10, Standard customers $60.55;
  • Triple Play customers will see a $5 increase in the second year of their two-year contract from $114.99 to $119.99.  First year pricing remains $99 for new customers;
  • Digital Premium Packages are increasing $2;
  • Economy Broadband (1Mbps) increases $2, Performance (12Mbps) increases $2, Blast! (16Mbps) increases $2, Ultra sees no price increases (but goes away for new customers effective 4/1);
  • Comcast phone line prices are also increasing in certain cases;
  • Each additional DVR drops by $5 — Verizon FiOS was hammering Comcast about DVR pricing.

There are no rate changes for business service customers or subscribers with “limited basic service.”  There is also no change in the company’s broadband usage allowance — 250 GB, the only part of Comcast’s service that seems to stubbornly remain at the same level year after year.

Comcast, the nation’s largest cable operator, blamed the mid-year price increases on increased programming and other business costs.

But the company is not exactly hurting.  Comcast’s 4th quarter earnings last year jumped 132 percent to $955 million dollars.  Rate increases that are designed to drive consumers into profitable service bundles, combining television, Internet, and telephone service, guarantee even better financial results in 2010.

Verizon is already capitalizing on Comcast’s rates by offering residents in southern New Jersey an even better price for Verizon FiOS — dropping from $109.99 for two years to $89.99, not including taxes and fees.  But like Comcast, Verizon wants you take a bundle of services, or else face higher prices.  The company recently increased the price for FiOS TV to $64.99 for standalone service.

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Syracuse Technology Columnist Falls Into Trap Believing Usage Caps Represent “Fairness”

A column this week in The Post-Standard falls into the trap of believing usage caps on wired broadband service represent “fairness.”

Al Fasoldt, who writes a technology column for the Syracuse, N.Y. newspaper, told readers they should investigate buying and/or using usage measurement tools in order to protect themselves from a surprising bill at the end of the month.

Caps can make their service fairer to all customers by blocking excessive downloads that clog the network, and those who exceed their caps can be charged a great deal extra for service. This amounts to free money for ISPs.

But there is something counterintuitive about promoting new ways to get entertainment on the Internet — by using Hulu, for example, to stream TV shows to your home computer — while telling customers they can’t use more than a certain amount of data.

[...]

What’s needed is a simple way to measure how much data you use per month. Cable providers sometimes provide a Web page that logs each customer’s transfer totals — call your ISP to find out if your plan has such a feature — but you can easily track usage yourself with data-usage software utilities.

Courtesy: DragonEyeFly

Time Warner Cable headquarters in Rochester, N.Y.

Fasoldt assumes facts not in evidence.  Simply put, there is nothing fair about usage caps, particularly on wired broadband service.  Fasoldt can be partly excused for making the assumption because he lives in Syracuse, where Verizon FiOS and Time Warner Cable compete heavily for customers in the Salt City.  Veterans of actual Internet Overcharging experiments, and those who live under usage caps and usage-based billing can testify about the true implications of such schemes.

They are nothing short of rationing broadband service for fatter profits.

In Rochester, where Fasoldt notes customers successfully fought off Time Warner’s experiment, customers do not have the luxury of two closely-matched competitors.  They have the cable company and a telephone company that stubbornly clings to its own 5 GB usage allowance in its terms and conditions, albeit presently unenforced.  Where competition is at bay, higher prices for limited service are in play.

At least Fasoldt admits it’s also about the money.

There is nothing counter-intuitive about promoting online video services and then slapping usage caps on them when you realize it’s really ALL about the money and not about “fairness.”  Limiting video consumption is critical to protecting cable television packages.  If you can watch it all online, why keep paying for cable-TV?  With a usage cap, there are no worries about that ever happening.

As this website has repeatedly documented, consumers do not need to invest in usage measurement tools that are a nuisance to install and monitor.  They just need a broadband provider that can be happy living off the billions in profits already earned from today’s unlimited broadband service without greedily trying to overcharge consumers even higher pricing for limited service in the future.

Fasoldt would do better by his readers telling them to follow the example of communities who have been exposed to such schemes.  They got involved, threatened to cancel service, and created a sufficiently large enough headache for providers who eventually determined, for now, it just wasn’t worth alienating customers with unwanted pricing schemes.

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