For those who may not fully grasp Net Neutrality, CNN’s Ali Velshi delivered a primer that helps explain how Internet traffic moves, how providers want to manage that traffic, and the implications of not enforcing robust Net Neutrality.  Velshi’s explanation delivers both sides of the argument with only a few minor errors.  We’d remind him consumers already paid for the big pipe depicted in the video.  Consumers should not have to pay twice for the same thing.  Less useful is CNNMoney Staff Writer David Goldman, who got several points wrong, especially about wireless. (8 minutes)

Verizon Wireless is willing to be aggressive to keep your business — if you are a good customer that pays your bill on time.

The company has been trying to deal with a growing number of its long-time customers who have gone “off-contract” and are still using phones they bought two, three, and even four years ago.  The issue?  Pricey data plans.

“A Verizon Wireless phone bill for a family of four can easily exceed $200 a month when smartphones come into play,” writes Stop the Cap! reader Jim in Honeoye Falls, N.Y. “Forget about $1.99 mystery data charge-inspired bill shock.  Just getting your regular monthly bill can cause your hair to fall out.”

Jim says his recent visit to Verizon left him numb when he ran the numbers about adding his teen children to his existing Verizon account.

“My daughter is fed up with AT&T and she wants out at the end of her contract, and she’s willing to sacrifice her iPhone to manage it,” Jim says. “Her brother shares the account and he’s offered choice words about AT&T’s dropped calls to all in earshot.”

“But I was stunned by the Verizon in-store representative who started throwing numbers at me about texting, data fees, and insurance — not to mention plan changes,” Jim said.  “I don’t remember cell phone service ever being this expensive.”

Jim is grandfathered into a plan sold by Verizon around five years ago, one that eats mobile web usage from the plan’s monthly minute allowance.

Those days are long gone.  A Verizon representative told Stop the Cap! the company did away with that arrangement “for the benefit of customers.”

“Customers would sometimes forget and leave their phone running a data application overnight and consume most of their plan’s minutes for the month,” was the story told to us.  “Customers would be angry and upset when they realized their minutes were gone.”

We countered it’s far worse to get a bill reflecting data use charged at $1.99 per megabyte, per instance — Verizon’s current policy for customers not on data plans.  That has led to some unfortunate bill shock incidents where customers have ended up with bills in the tens of thousands of dollars.

Verizon “helped” its customers there as well — mandating expensive data plans for customers owning today’s higher-end phones.  Verizon argues a $30 a month flat rate data plan is better than being socked with a huge bill at Verizon’s extraordinary pay-per-use price.

“That’s like telling a mugging victim to be thankful they weren’t also raped,” Jim retorts.

What burns Jim about all of this is that unlimited data service plans do not include unlimited texting.

“It’s offensive that Verizon asks you to pay $30 a month to push mobile data around, but that doesn’t include a single text message,” Jim writes. “If you forget to add a text plans, it’s 20 cents a message.”

Verizon offers a budget package of 250 text messages for $5 per month.

Jim’s journey is a familiar one we’ve heard repeatedly from Verizon Wireless customers who are interested in exploring today’s advanced feature phones, but are turned off by the corresponding fees levied by the wireless carrier — fees that can dramatically increase customer bills.

“We pay around $100 a month for two lines with Verizon when all of the taxes are added up,” Jim says. “To bring my kids on board, we’d have to upgrade away from our current cell phone plan to one with at least two mandatory data plans, which would add $60 a month to our bill just for that.”

Verizon’s back-of-the-envelope calculations suggest Jim’s new Verizon bill would easily exceed $200 a month based on their usage and plan features.

“That’s crazy,” Jim feels.

Those prices cause customers like Jim to head for the door, telling Verizon to leave their account the way it was when they walked in the door.

Verizon seems to be getting that, because the company is increasingly targeting upgrade offers to contract-renewal-resistant customers, especially with family members eager to jump into smartphones.

The most welcome news — rumors the company may explore offering a FamilyShare Data Plan that carries a usage allowance, but is charged per account, not per phone.  For casual users and those more than happy to switch to Wi-Fi where available, that could represent serious savings.

In the meantime, two promotions that are available offer some help for customers looking to upgrade:

FamilyShare – Smartphones Talk Free a/k/a $10 off data plan

Marketed in two ways, this promotion targets multi-line customers with one or more members seeking a smartphone upgrade, but do not want to have a stroke when they open the bill.

The promotion works with existing Verizon Nationwide Family SharePlans starting at $69.99 monthly access for 700 Anytime Minutes.  Add a $29.99 data plan for each additional smartphone and get $9.99 off your bill for each smartphone, per month, for the next two years. Sometimes this is pitched as “$10 off our unlimited $29.99 data plan” — because it is the price of the data plan that usually scares would-be smartphone customers back to their old phones.  Charging $20 instead of $30 is soothing enough to ease some customers on board the smartphone revolution.

“This is an ideal option for customers with a spouse or child wanting to move to a smartphone,” said Marni Walden, vice president and chief marketing officer for Verizon Wireless.

The caveats.  Your new smartphone will probably come with a two year contract extension and the primary line on the account is not qualified for the discount.  But there is an easy way around this.  If one or more lines on your account are not going to upgrade, simply have Verizon reassign one of those lines to be the primary line.  Legacy service plans no longer offered will have to be abandoned, and there is no way back to them.  This promotion expires January 7, 2011.

Talk (450 Minutes) With Unlimited Text and Data for $69.99 per month

Price conscious consumers have started giving carriers like Sprint a second look.  Rated the most improved carrier by Consumer Reports, Sprint’s aggressive pricing has begun to attract some Verizon customers.  In response, Verizon has been testing a new promotional plan that makes data and texting unlimited for one flat price.  The plan was initially open only to those who received an invitation in e-mail, but a quick call to Verizon Wireless customer service finds at least one call center that can add this plan for anyone — no invite required.

The plan’s price for single line accounts is $69.99 per month and a one year contract renewal is required for those with less than one year remaining on existing contracts (or those off-contract altogether.)  If you still have more than a year remaining on your contract, no further extension is required.

A companion FamilyShare plan delivers 1,400 minutes per month.  The monthly $139.99 price delivers service for two lines.  Each additional line is $19.99 per month, which includes unlimited texting and data.  For heavy users with several smartphones on an account, this plan can represent significant savings, and does not expire.

Caveats: Getting either plan might take a few calls to customer service.  Not every call center can add this promotion for customers.  Voice minutes might be too limited for some customers, but Verizon also offers the Friends & Family option, allowing unlimited calling to a select group of numbers.

Phone Promotions

This holiday season, selecting your new phone is probably going to be the cheapest part of your relationship with Verizon over the next two years.  The carrier is literally giving away several smartphones, offering buy one, get one deals on others.

Promotions like these from Verizon should not be the final word on pricing. Compare offers from online phone retailers and then call customer service and negotiate prices down.

Consumer advocates acquainted with the wireless market traditionally suggest the biggest savings come from online merchants like Wirefly, Dell Mobile, or Amazon.

At first glance, that advice seems sound.

Jim’s daughter and son both want the Droid X which sells for $199.99 on Verizon’s website. Verizon offers a Buy One, Get One special on the Droid X currently so the effective cost for two phones is $199.99.

But hang on a moment.  Dell Mobile (powered by Wirefly’s parent company) has the same phones for much less — $19.99 each, based on how the phones would be added to Jim’s account.  Until last evening, Dell even threw in a $25 gift card to sweeten the deal.  Excluding that, the difference in price between Verizon and Dell was a whopping $160 for the exact same phone.

Trying to narrow the difference used to be an exercise in futility for many Verizon customers.  With a market leadership position, Verizon doesn’t have to viciously compete on price.  As a result, hard fought negotiations often yielded little more than an accessory like a car charger thrown in to sweeten the deal.

But those days are starting to change, especially when Verizon considers you an excellent customer prepared to change carriers.

Lesson one for Jim was to avoid Verizon stores if he wanted the best possible deal.  As he discovered, Verizon store employees are recalcitrant about giving away the store as they try and protect their commissions and sales numbers.  Besides, many of the employees Jim dealt with seemed to know less about Verizon’s plans than he did.

Jim decided he could handle Verizon’s Smartphones Talk Free promotion, but he wasn’t about to leave $160 on Verizon’s table for the phones.  He visited a Verizon store in nearby Rochester to see what could be done about the price of the phones.

“Basically nothing was the answer,” Jim says.

“These guys will say anything to make a sale,” says Jim.  “But when you try and negotiate with them, they have little authority and less to offer.”

He reports a sales representative finally offered him free cell phone cases and a spare charger (a $100 value according to the Verizon rep — a value Jim disputes) instead of a price discount.

“I walked out,” said Jim.

While inquiring about how to place his order with Amazon, the online retailer instructed him to call Verizon directly to reconfigure something on his account before placing the order.

That was a fatal mistake… for Amazon.

“I was very surprised that the Verizon Wireless representative immediately started to fight for my business in ways the in-store reps never did,” Jim reports.

When Jim made it clear he was not about to give Verizon $160 more than he had to, the Verizon Wireless representative reviewed his account and placed Jim on hold.  Moments later, Jim learned Verizon would match Amazon’s offer.

“That was actually a relief for me because those third party online retailers have their own contracts you have to sign yourself committing to no account changes for six months, and you are never really sure whether they’ll configure the account properly,” Jim said.

Jim also scored free overnight FedEx shipping in time for Christmas and the representative promised to call him back after the phones arrived to finish setting up the account.

The only downside is that Verizon is still sticking Jim with mail-in rebates that will be fulfilled with debit cards.  His charges for the new phones will get added to his regular Verizon bill, however.  No credit card required.

Verizon’s willingness to extend offers can depend on your business relationship with the company.  Making late payments or arriving credit challenged can dramatically reduce how far Verizon will extend its hand.

Our advice to others in Jim’s position:

1. Call Verizon customer service and deal with them, not store employees when trying to negotiate the best deal.  A good phone rep will deliver discounts in-store salespeople know nothing about and won’t be willing to offer even if they did;
2. Make it about the price.  If you have a competing offer, share it with them.  Verizon can easily adjust prices downwards with their New Every Two $50 credit and do better with additional credits such as a free month of service to effectively knock your price down;
3. If they offer accessories, hold out for actual billing credits.  Buy your own accessories later;
4. Be prepared to hang up and call back if you get a difficult representative.  Some call centers are better than others;
5. Consider the competition.  Customers on individual plans might find far better deals with prepaid carriers like Page Plus that use Verizon’s network.  Or it may be time to consider a different carrier.
   

No, don't get up. We've got it.

Want an example of the kind of lazy journalism you get from one of America’s largest news operations, about to become a part of the Comcast family?  Look no further than MSNBC’s Wilson Rothman, who shared some serious Net Nonsense in his piece: ‘Open’ Internet just a pipedream.

Rothman apologized in a tweet after publishing the essay, admitting it was “cynical.”  But we want to know where the apology is for being wrong on the actual facts.

The author tells readers it’s a Comcast world this winter:

As long as you buy Internet access via cable provider, wireless carrier or telecom, you’re going to have to play — or at least pay — by their rules. They’ll just have to make sure to tell you what those rules are. That seems to be the real gist of the FCC order that was ratified today.

[...]The only people currently getting throttled by their broadband providers are file-sharing pirates who wouldn’t be protected by any net neutrality regulation anyway; meanwhile, wired and wireless broadband networks are increasingly controlled by a smaller, more powerful cadre of competitors.

Tiered pricing has to happen

You can use as much electricity from the power grid as you want, but you have to pay by the kilowatt hour. If you think of the Internet as a utility — and why shouldn’t you? — network management should look something like that. Prices offered by regulated private companies should be competitive and reasonable, but highly metered. Sadly, that means no more flat-fee unlimited access.

[...]I don’t mean to sound cynical, but I come at this from a technology background, not a legal or political one. What I see are all the ways in which “public” access to utilities become profit centers for increasingly massive companies.

After the break-up of the Bells, the phone companies eventually consolidated and worked their way back together like some kind of liquid-metal Terminator. The good news? Instead of a single monopolistic phone company, we have two Leviathans and some smaller fish. Long-distance service used to be their cash cow; now it’s wireless and broadband, and they’re not going to let those slip so easily.

“Give that man a raise,” said Brian Roberts, Comcast CEO.

Seriously, Rothman might come from a technology background, but he sure doesn’t know his way around the broadband public policy debate. Digging into the reasons for today’s broadband mess would require actual reporting.

Rothman suggests Americans are effectively required to accept today’s decision from the Federal Communications Commission.  That’s akin to telling Time Warner Cable customers they should have just knelt down to the cable company’s 2009 pricing experiments.  Or that North Carolina needed to padlock community broadband networks until they could be sold on eBay to the highest Big Telecom bidder.  Or that Frontier can and should get away with a 5GB usage cap.

We said no.  You said no.  And we won all three of those battles.

Today’s FCC vote has relevance only until the first major cable or phone company (or interested third party) files a lawsuit.  The outcome is predictable — the same court that threw out the FCC’s authority earlier this year will do so again, for many of the same reasons.  For consumers, that isn’t all bad.

Rothman’s claim that only pirates are victims of speed throttling is demonstrably false, and nothing less than journalistic malpractice.  Innocent consumers are routinely throttled on wireless and wireline broadband networks using “network management” technology.  Are Clear’s customers all pirates?  How about Cricket’s clients?  Exceeding an arbitrary amount of usage on these networks guarantees you a spot in the dial-up-like doghouse.

The author also misses the point about increasing consolidation in the Big Telecom marketplace.  Cadre?  Sure.  Competitors?  Hardly.  Most Americans endure a broadband duopoly for reasonable Internet access — a cable and phone company.  Cable and phone companies have quite a deal.  They effectively charge around the same price for service and never have to worry about a third cable or phone company entering the marketplace.  Cable companies don’t compete with other cable companies.  Same for telephone companies.  Community broadband networks deliver the only real competition some areas have, which is why Big Telecom wants to ban these upstarts wherever they can.  Big Telecom believes Americans should not get to choose an alternative cable company if Comcast delivers terrible service.  Consumers living in small communities like Penn Yan, N.Y., live with Verizon DSL, if they are lucky.  Outside of the immediate town limits, there isn’t a cable competitor, much less another phone company.  That’s the real “take it or leave it” Americans contend with.

Rothman's electric utility analogy is as valid as charging for broadband by the foot.

Why shouldn’t Americans think of broadband as just another electric utility?  Because it isn’t.  This common talking point/analogy adopted by Rothman’s future employer has as much validity as pricing broadband by how many feet of wire was necessary to install it.

Broadband is neither a limited resource nor a product that requires a utility to purchase raw materials to perpetually generate.  His argument works only if a provider “generated” the actual content you consume online.  They don’t — they simply transport content from one point to another over a network that becomes enormously profitable once the initial construction costs are paid.  Rothman can discover this for himself reviewing the quarterly financials of broadband providers.  After billions in profits are counted, it’s clear this is one recession-proof industry that is hardly hurting.

It’s no mistake these analogies always leave out the one utility that is most comparable to broadband — telephone service.  You know, the one service that is rapidly moving towards unlimited, flat rate — talk all you want.  Providers using the consumption billing argument cannot afford to include phone service in their analogy, because then the ripoff would be exposed.  One would think a reporter for NBC News might have managed to figure that one out as well, but no.

The fact is, there is no healthy competition in broadband.  You know what that means — high prices for limited service.  Rothman seems ready and willing to take whatever Big Telecom wants to dish out, but then his paycheck is about to be paid by one of those companies, so he can afford to be cynical.

Unfortunately for his readers, Rothman is oblivious to the reasons why phone companies have consolidated and consumers are stuck with the results.  The recipe:

• A multimillion dollar lobbying effort that includes huge contributions to politicians, astroturf “dollar-a-holler” groups paid to front for Big Telecom’s agenda, and a mess of scare tactics predicting horrible things if they do not get their way;
• A supine media that simply accepts provider arguments as fact, deems the abusive practice that follow as inevitable, and apologizes later for being cynical;
• An uninformed public that decreasingly relies on media companies that also happen to have direct financial interests in the outcome of these public policy debates.

Consumers have more power than Rothman thinks when they take a stand with elected officials.  When taking AT&T money becomes more costly than voting for their constituents, elected officials will do the right thing.  That takes individuals letting elected officials they are watching them closely on these issues.

Consumers can also tell their local elected officials that the Big Telecom Money Party needs to come to an end.  A community-owned broadband network that throws out the online toll booths and creates a network for Main Street instead of Wall Street is the functional equivalent of handing unruly Verizon and Comcast their coats and escorting them the door.

Sen. Al Franken (D-Minn.) took to the Senate floor this weekend to explain his strong opposition to the proposed Comcast-NBC/Universal merger, how some of the nation’s largest telecom companies use limited competition to maintain confiscatory pricing for service, and why feeding the Big Telecom beast with favors requested in multi-million dollar lobbying campaigns will cost ordinary Americans more money for less service in the future.  Franken’s remarks are a refreshing change of pace from the usual Congressional rhetoric, reduced to “Obama’s takeover of the Internet,” “socialist broadband,” and “Maoist net policies” we usually hear about.  It’s well worth the time to educate yourself about Big Telecom’s agenda.  (25 minutes)

FCC Chairman Julius Genachowski sold President Obama's campaign pledge, his credibility, and you down the river in a sweetheart deal with Big Telecom.

The Federal Communications Commission voted today to pass what Chairman Julius Genachowski called “Net Neutrality” — reforms that will guarantee a free and open Internet.  But critics charge any similarity to actual Net Neutrality is purely coincidental.

In a 3-2 vote along party lines, the Democratic Commissioners approved Genachowski’s framework to keep providers from blocking access to websites.

Genachowski claims the rules will protect consumers from providers controlling the free flow of online content and will provide regulatory certainty for the broadband marketplace.  Providers, who have either lined up behind the chairman or have muted their criticism of the proposal in recent days, suggest they weren’t about to censor Internet content in the first place and that Net Neutrality is a cause in search of a problem.

Public interest groups were less than satisfied, dismissing today’s proceedings as “Net Neutrality-lite,” or “Net Neutrality with more (loop)holes than Swiss cheese.”  In particular, Genachowski’s willingness to exempt wireless broadband from the rules was a very sore spot among Net Neutrality proponents and some in Congress.

“Maybe you like Google Maps. Well, tough,” said Sen. Al Franken (D-Minn.) “If the FCC passes this weak rule, Verizon will be able to cut off access to the Google Maps app on your phone and force you to use their own mapping program, Verizon Navigator, even if it is not as good. And even if they charge money, when Google Maps is free.”

Franken is convinced excluding wireless networks from open Internet rules is the first step towards a free speech calamity.

“If corporations are allowed to prioritize content on the Internet, or they are allowed to block applications you access on your iPhone, there is nothing to prevent those same corporations from censoring political speech.”

Craig Aaron, managing director at Free Press bemoaned today’s vote over rules he suggests were written by the industry itself.

“These rules don’t do enough to stop the phone and cable companies from dividing the Internet into fast and slow lanes, and they fail to protect wireless users from discrimination. No longer can you get to the same Internet via your mobile device as you can via your laptop,” Aaron said. “The rules pave the way for AT&T to block your access to third-party applications and to require you to use its own preferred applications.”

The Obama Administration is likely to claim credit for the new rules and declare Net Neutrality a campaign promise fulfilled, a claim that makes several net activists’ blood boil.

“Chairman Genachowski ignored President Obama’s promise to the American people to take a ‘back seat to no one’ on Net Neutrality,” says Aaron. “He ignored the 2 million voices who petitioned for real Net Neutrality and the hundreds who came to public hearings across the country to ask him to protect the open Internet. And he ignored policymakers who urged him to protect consumers and maintain the Internet as a platform for innovation. It’s unfortunate that the only voices he chose to listen to were those coming from the very industry he’s charged with overseeing.”

Aneesh Chopra, Obama’s chief technology officer said on Dec. 1 that the FCC proposal was an “important step in preventing abuses and continuing to advance the Internet as an engine of productivity growth and innovation.”

Genachowski’s two fellow Democratic commissioners agreed, noting the policies probably don’t go far enough, but it’s a start and they wouldn’t oppose them.  But Commissioner Michael Copps made it clear he remains unhappy with how the entire debate was managed.  He fears corporate control of broadband content will bring the same mediocrity large corporations have managed to deliver Americans over radio and television.

“I don’t want the Internet to travel down the same road of special interest consolidation and gate-keeper control that other media and telecommunications industries — radio, television, film and cable — have traveled,” Copps said. “What an historic tragedy it would be,” he said, “to let that fate befall the dynamism of the Internet.”

If today’s mild net reforms are a step forward, it’s a small one say critics like the Center for Media Justice.  They suggest the FCC’s idea of Net Neutrality offers “minimal protections” for consumers.

“Our greatest fears have been realized,” said Malkia Cyril, Executive Director of the Center for Media Justice. “The Internet can only work if it’s a truly level playing field. Telecommunications companies have used their considerable wealth and lobbying might to exclude some of the most vulnerable communities from the only protection there is from their corporate abuses. These rules aren’t fair, and they don’t provide a path to equity or opportunity. We’re deeply concerned that today’s vote sends a clear message to our communities that if you access the Internet through your cell phone, you don’t count. The FCC has sadly shirked its responsibility to protect all Internet users equally.”

All of the debate may ultimately mean nothing should one of the providers decide to challenge the new rules in court.  The Commission failed to address an earlier court decision that ruled the Commission’s regulatory framework was based on nothing more than good intentions.  The agency was toying with the idea of reasserting authority over broadband using a different framework, but providers furiously lobbied against that, claiming it would “regulate the Internet” under rules designed for landlines.  The Commission’s decision to proceed under a foundation condemned by an earlier federal court ruling exposes an obvious weak spot providers could attack in additional lawsuits.

“We know these rules will be hotly contested,” said Betty Yu, MAG-Net Coordinator. “As they roll out, grassroots communities will continue to monitor the process, ensuring that the rights of wireless users are protected from the over reach and abuses of AT&T, Verizon, Comcast and other telecommunications companies. These rules are a compromise- unfortunately, what was lost in the deal are the rights of wireless users.”

Verizon may make things easier for Yu and other consumer groups to clear the playing field and start over again.  The company released a statement today that foreshadows a willingness to challenge the agency’s Net Neutrality rulemaking in court (underlining ours):

“While it will take some time for us to analyze the F.C.C.’s rules and the order once they are released, the F.C.C.’s decision apparently reaches far beyond the net neutrality rules it announced today,” the company said in a statement. “Based on today’s announcement, the FCC appears to assert broad authority for sweeping new regulation of broadband wireline and wireless networks and the Internet itself. This assertion of authority without solid statutory underpinnings will yield continued uncertainty for industry, innovators, and investors. In the long run, that is harmful to consumers and the nation.”

Net Neutrality Order Snippets

The Federal Communications Commission’s Open Meeting introducing Net Neutrality and includes a vote on the rulemaking.  (2 hours, 42 minutes)

AT&T U-verse customers are receiving postcards in their mailboxes reminding them they are receiving a “tremendous value” from the service.  The card even promises, “U-verse will keep getting better in 2011.”

Time will tell if subscribers agree, but one thing is certain — they will be paying more to find out.

AT&T has been mass-mailing rate increase postcards to customers in some of their service areas, announcing rate increases for programming packages and the company’s Residential Gateway hardware:

Rethink Your Bill: Stop the Cap! reader Tim sent us a copy of AT&T's U-verse "holiday greetings."

The rate increases range from $1 for AT&T’s hardware to $5 a month for certain programming packages.  AT&T blames the rate increases on “increased business costs, including costs associated with higher programming fees.”

The increases take effect Feb 1.

“Funny they are doing this pretty much at the same time Time Warner in my area sent out a notice about rate increases,” our reader Tim observed.

This slide, produced to sell "network management" equipment, is the best argument for Net Neutrality around.

Want to visit Facebook?  That will be two cents per megabyte, please.  Skype?  You can get a real bargain this month — your ISP is only charging you $5 for an unlimited monthly permission pass.  YouTube?  All customers with a deluxe bundled broadband plan get a special discount — just 50 cents for up to 60 videos, this month only!

All of these charges, levied by your Internet Service Provider, are real world scenarios being sold by two equipment vendors — Allot Communications and Openet, for immediate use on Net Neutrality-free wireless broadband networks.  Thanks to Stop the Cap! readers Lance and Damian for sending us the story.

Both companies are excited by the potential harvest of bountiful revenue — for themselves in selling the equipment that will carefully monitor what you do with your Internet connection and then control what kind of experience you get, and for providers who can finally bend the usage curve down while “finally” getting average revenue per customer shooting sky high once again.

In the webinar, run last Tuesday and moderated by Fierce Wireless, the two companies carefully divided their one hour presentation between the technological and financial benefits of “network management” technology.  For every statement about how their bandwidth management system would improve the predictable responsiveness of the provider’s network, another comment followed, touting the enormous new revenue potential this technology will bring providers, all without costly network upgrades.

Poor provider. His stuffed pockets of profit are leaking your money paid to access websites you want to visit. But with Allot and Openet's products, the pot 'o gold is just a few steps away.

On Tuesday, the Federal Communications Commission will vote on a watered-down Net Neutrality proposal that would do nothing to prevent this nightmare scenario from becoming reality.  The webinar and its accompanying slides couldn’t illustrate Net Neutrality-proponents’ arguments better:

1. Such technology requires providers to carefully track and monitor everything you do with your web connection, obliterating privacy and creating a potential data trail that could be exploited for just about anything.  Indeed, Allot and Openet treat the data tracking feature as a benefit, opening the door to marketing campaigns to upsell your broadband connection or target upgrade offers based on your web history;

2. It’s all about the money.  Allot and Openet see their products as a cost-saver for providers to control expenses by cutting speeds/access for heavy users to provide a more consistent service for others, reducing the urgency to upgrade networks.  The companies also heavily focus on the revenue opportunities available from Internet Overcharging schemes;

3. The webinar includes a slide showing that providers can charge individual fees just to visit and utilize third party websites and applications, while letting providers deliver their own content, services and applications for free.  Got a bothersome competitor?  Just make a quick change with Allot’s product and your customers will face a withering admission fee in the amount you choose before they can even use the application;

4. The technology allows providers to wreak special havoc on peer-to-peer traffic, always the bane of traffic-conscious ISPs;

5. Want to extract more cash from an individual subscriber?  Providers can custom-design packages based on web site habits, usage, speed, and even the time of day the person is most likely to use the web.  Providers can then develop so many different usage packages, comparison shopping becomes meaningless.  The price you pay may be different than what others on your street pay, and you may never know by how much or why.

These Big Telecom workmen are not hard at work upgrading networks to meet demand. They are wrangling an Internet Overcharging scheme to reduce your usage while charging you more. (All of these slides were produced by the vendors themselves.)

Public Knowledge legal director Harold Feld saw right through the slide show: “If you want the slide deck to show why we need the same rules for wireless and wireline, this is it.”

Listen to the audio portion of “Managing the Unmanageable: Monetizing and Controlling OTT Applications,” which does not include the slide show. (60 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Broadband advocates have been warning providers have been dreaming of this kind of pricing for a few years now.

“I have been saying that this is where they want to go for a while,” Barbara van Schewick wrote to Wired. “The IP Multimedia Subsystem (IMS), a technology that is being deployed in many wireline and wireless networks throughout the country, explicitly envisages this sort of pricing as one of the pricing schemes supported by IMS.”

Although the system described by the webinar is currently being sold for use on wireless networks, nothing prevents providers from adopting similar schemes on their wired networks, arguing their use is about “intelligent network management,” not content or pricing discrimination.

It’s a scenario likely to be tested soon, especially with FCC Chairman Julius Genachowski’s watered down Net Neutrality proposals.  More than one observer believes the chairman has made a deal with the Big Telecom Devil: observe our watered down rules, don’t sue to have them thrown out, and the Commission will not invoke Title II and reinstate regulatory authority over broadband.

But as anyone who watches the broadband industry must realize by now, providers always break these deals.  They will sue the moment a controversy erupts that is not in their favor, and they are very likely to win.

Crowell

Fibrant, Salisbury, N.C., community-owned fiber to the home network, shares advice to other communities considering building their own self-reliant, locally-owned broadband networks: work together and outsource the headend.

Christopher Mitchell from Community Broadband Networks alerted us to a video from TelecomTV interviewing Michael Crowell, Fibrant’s Director of Broadband Services.  In it, Crowell shows off Fibrant’s GPON fiber network and explains what the city has learned from the experience of building its own network.

Ironically, a significant part of Fibrant’s network came cheap thanks to Windstream.  It seems what the residents of Salisbury won was also a loss for those living in Concord, N.C.

Crowell explains Concord was served by a small independent phone company — Concord Telephone.  They had decided to build their customers an advanced fiber to the home network similar to Fibrant, until the company was sold to Windstream.  Windstream has no interest in delivering world-class fiber broadband to Concord (or anywhere else), and left Concord with dismal DSL, selling the fiber network equipment to Salisbury dirt cheap — for around 10 cents on the dollar.

But not everything has come so easy to Fibrant, says Crowell.  One of the company’s largest expenses is its headend, which receives, monitors, and distributes the hundreds of video channels Fibrant customers receive.

“What we think would be a better model going forward is for the other cities and counties to do what is called an open access network.  They build and maintain the fiber but get other providers to provide the service,” Crowell said.

Crowell proposes allowing the state’s two largest municipal broadband projects — Wilson in the east and Salisbury in the central-west part of the state, handle the headend, as well as customer service calls and billing on behalf of other communities interested in building their own municipal fiber networks.  Both cities can deliver bulk feeds of video channels to different parts of the state and that saves other communities from spending money to hire employees to monitor redundant, expensive equipment.

That is more or less what is happening further south in Opelika, Ala., where work is underway constructing a fiber to the home network.  But in Opelika, city officials have decided to let cable overbuilder Knology run the network.

Knology’s network is already up and running in nearby Auburn, according to Royce Ard, general manager for Knology.  Ard told WRBL TV:

“We met our scheduled date for installing our first Auburn test customers and the test is progressing nicely. We will begin adding our first paying customers by the end of October,” Ard said. “Initially, our services will be available in a limited number of neighborhoods, but as we build out our network we will contact homeowners and let them know when services are available in their area.”

Knology projects being able to offer service to its first Opelika customers by the second quarter of 2011.

“Knology is very excited about entering the Opelika market,” Ard said. “The technology that we are deploying in the Auburn/Opelika markets will allow us to offer consumers a much better product than they have today. This, along with Knology’s commitment to customer service, will greatly improve the overall experience for consumers in Auburn and Opelika.”

Fibrant’s Michael Crowell, interviewed by TelecomTV, walks viewers through Fibrant’s fiber network and discusses community-owned fiber networks.  (7 minutes)

In a welcome turn of events, the League of United Latin American Citizens (LULAC), which has routinely turned up as a member of Big Telecom-backed astroturf campaigns and takes money from AT&T, has come together with Latinos for Internet Freedom to issue a joint statement calling on the Federal Communications Commission to adopt equal Net Neutrality policies for wired and wireless broadband services.

“Although we disagree on some of the components of the proposed network neutrality regulations, there is one point on which we are in lock step: the FCC’s network neutrality rules must apply equally to wireline and wireless internet access.  Of course we understand that what is ‘reasonable network management’ may be slightly different over different types of connections.  Cost is the primary barrier to broadband adoption, and Latinos are turning to their mobile phones as their only onramp to the internet.  We are committed to finding ways to lower broadband costs by increasing competition through wireless access and other means.  It is therefore essential that the FCC ensures that users of wireless and wireline services are protected by its openness rules.”

Of course, broadband providers’ demands for deregulation and unified opposition to Net Neutrality have never delivered and will never provide cheaper Internet service to anyone.  In fact, the court ruling that eliminated the FCC’s authority over broadband gave providers nearly a year of a wide open marketplace, yet many providers are now sending out notices they are -increasing- broadband prices for subscribers.  Net Neutrality has never been enforced against wireless networks either, and as a result most either usage cap, throttle, or charge enormous overlimit fees for users deemed to be “using too much.”

Increased competition can bring lower prices, but only if it extends well beyond today’s duopoly.  In areas where one provider is likely to maintain a de facto monopoly, effective oversight is required to ensure consumers receive adequate service at fair prices.

Still, it is a surprising and welcome change to see LULAC recognizing the true nature of broadband access for many economically-challenged Americans, especially in minority communities where unemployment continues to be catastrophic.  Some consumers are finding prepaid wireless broadband service to be one way onto the Internet, yet Big Telecom has sought to keep those networks exempt from any Net Neutrality consumer protections.  That cannot be allowed to happen.

Watch these two competing spots from Verizon and the Latinos for Internet Freedom.  One is self-serving and a tad condescending, the other calls for a free and open Internet where individuals get a level playing field to tell their own stories and live their own lives without fear or special favor.  (2 minutes)

It's a three hour drive down Interstate 81 from Utica to Wilkes-Barre.

WKTV-TV Utica is off Time Warner Cable's lineup in parts of central New York this morning.

Viewers across Oneida, Herkimer, and other adjacent central New York counties lost their local NBC station early this morning after another retransmission consent dispute led Time Warner Cable to drop WKTV-TV in Utica, N.Y., from the lineup.

The fact Time Warner dropped a station is hardly unprecedented, but the cable company managed to replace the station almost immediately.  Away went WKTV, in came Nexstar-owned WBRE-TV, an NBC station serving Wilkes-Barre/Scranton, Penn.

This morning, Mohawk Valley viewers woke up to watching local news and weather for the Susquehanna Valley — 187 miles away to the south.

While Time Warner’s apparent agreement with WBRE keeps NBC shows rolling, the loss of local news and weather represents a major blow for area subscribers, many enduring a western and central New York winter that has brought more than 50 inches of snow in just the last two weeks in some areas.

Utica city officials expressed concern about the loss of the local Utica station because important snow emergency alerts were often delivered over the station.

“They might as well have imported a station from Florida, because there is very little in common between Herkimer County, New York and Luzerne County, Pennsylvania,” writes Steve, who lives in Herkimer.  “You would have thought they would have just grabbed an NBC station from Syracuse.”

...replaced with WBRE-TV, a station in Wilkes-Barre, Penn.

Apparently, Time Warner has permission from Nexstar to import the distant signal of the Pennsylvania station for impacted subscribers.  The effective reinstatement of network programming may make it more difficult for WKTV’s owner, Smith Media, to negotiate the station’s return to Time Warner’s lineup anytime soon.  That one NBC affiliate may have granted permission to replace another station during a contract dispute may become a point of contention on the network level.  Traditionally, broadcasters have not been quick to undercut other stations with such carriage agreements.

Smith’s other stations were also affected.  Time Warner dropped WFFF (Fox) AND WVNY (ABC), which serve the Burlington, Vt. market and the CW-affiliated digital sub-channel running alongside WKTV in Utica.  The station owner launched a website to share their position and educate people about how to receive the signals either over-the-air or via satellite.

In nearby Rochester, Time Warner continues to play hardball with Sinclair Broadcasting over a carriage agreement renewal for WUHF-TV.  But Time Warner customers facing the loss of the Fox affiliate will not see any interruption of Fox network programming — the cable company has a separate agreement with the network.  Ironically, Sinclair jointly operates WUHF with Nexstar Broadcasting of Rochester LLC, the owner of WROC-TV, the city’s CBS affiliate.

Time Warner’s replacement of WKTV-TV in Utica with a distant station may be a new tactic in the hardball war over cable-broadcaster carriage agreements.  WKTV ran several stories about how the station’s loss impacts the area.  YNN’s Central NY news station, run by Time Warner Cable, also ran its own story this morning, all of which are covered here.  (9 minutes)