A research report sponsored by the National Cable & Telecommunications Association, the nation’s largest cable lobbying group, has concluded that millions of broadband stimulus dollars are being wasted by the government on broadband projects that will ultimately serve people who supposedly already enjoy a panoply of broadband choice.

Navigant Economics, a “research group” that produces reports for its paying clients inside industry, government, and law firms, produced this one at the behest of a cable industry concerned that broadband stimulus funding will build competing broadband providers that could force better service and lower prices for consumers.

• More than 85 percent of households in the three project areas are already passed by existing cable broadband, DSL, and/or fixed wireless broadband providers. In one of the project areas, more than 98 percent of households are already passed by at least one of these modalities.

• In part because a large proportion of project funds are being used to provide duplicative service, the cost per incremental (unserved) household passed is extremely high. When existing mobile wireless broadband coverage is taken into account, the $231.7 million in RUS funding across the three projects will provide service to just 452 households that currently lack broadband service.

Navigant’s report tries to prove its contention by analyzing three broadband projects that seek funding from the federal government.  Northeastern Minnesota, northwestern Kansas, and southwestern Montana were selected for Navigant’s analysis, and unsurprisingly the researcher found the broadband unavailability problem overblown.

The evidence demonstrates that broadband service is already widely available in each of the three proposed service areas. Thus, a large proportion of each award goes to subsidize broadband deployment to households and regions where it is already available, and the taxpayer cost per unserved household is significantly higher than the taxpayer cost per household passed.

The cable industry funds research reports that oppose fiber broadband stimulus projects.

But Navigant’s findings take liberties with what defines appropriate broadband service in the 21st century.

First, Navigant argues that wireless mobile broadband is suitable to meet the definition of broadband service, despite the fact most rural areas face 3G broadband speeds that, in real terms, are below the current definition of “broadband” (a stable 768kbps or better — although the FCC supports redefining broadband to speeds at or above 3-4Mbps).  As any 3G user knows, cell site congestion, signal quality, and environmental factors can quickly reduce 3G speeds to less than 500kbps.  When was the last time your 3G wireless provider delivered 768kbps or better on a consistent basis?

Navigant also ignores the ongoing march by providers to establish tiny usage caps for wireless broadband.  With most declaring anything greater than 5GB “abusive use,” and some limiting use to less than half that amount, a real question can be raised about whether mobile broadband, even at future 4G speeds, can provide a suitable home broadband replacement.

Second, Navigant’s list of available providers assumes facts not necessarily in evidence.  For example, in Lake County, Minnesota, Navigant assumes DSL availability based on a formula that assumes the service will be available anywhere within a certain radius of the phone company’s central office.  But as our own readers have testified, companies like Qwest, Frontier, and AT&T do not necessarily provide DSL in every central office or within the radius Navigant assumes it should be available.  One Stop the Cap! reader in the area has fought Frontier Communications for more than a year to obtain DSL service, and he lives blocks from the local central office.  It is simply not available in his neighborhood.  AT&T customers have encountered similar problems because the company has deemed parts of its service area unprofitable to provide saturation DSL service.  While some multi-dwelling units can obtain 3Mbps DSL, individual homes nearby cannot.

Navigant never visited the impacted communities to inquire whether service was actually available.  Instead, it relied on this definition to assume availability:

DSL boundaries were estimated as follows: Based on the location of the dominant central office of each wirecenter, a 12,000 foot radius was generated. This radius was then truncated as necessary to encompass only the servicing wirecenter. The assumption that DSL is capable of serving areas within 12,000 is based on analysis conducted by the Omnibus Broadband Initiative for the National Broadband Plan.

Frontier advertises up to 10Mbps DSL in our neighborhood, but in reality can actually only offer speeds of 3.1Mbps in a suburb less than one mile from the Rochester, N.Y. city line.  In more rural areas, customers are lucky to get service at all.

Cable broadband boundaries were estimated based on information obtained from an industry factbook, which gathered provider-supplied general coverage information and extrapolated availability from that.  But, as we’ve reported on numerous occasions, provider-supplied coverage data has proven suspect.  We’ve found repeated instances when advertised service proved unavailable, especially in rural areas where individual homes do not meet the minimum density required to provide service.

We’ve argued repeatedly for independent broadband mapping that relies on actual on-the-ground data, if only to end the kind of generalizations legislators rely on regarding broadband service.  But if the cable industry can argue away the broadband problem with empty claims service is available even in places where it is not (or woefully inadequate), relying on voluntary data serves the industry well, even if it shortchanges rural consumers who are told they have broadband choices that do not actually exist.

Navigant’s report seeks to apply the brakes to broadband improvement programs that can deliver consistent coverage and 21st century broadband speeds that other carriers simply don’t provide or don’t offer throughout the proposed service areas.  The cable industry doesn’t welcome the competition, especially in areas stuck with lesser-quality service from low-rated providers.

Phillip Dampier

Stop the Cap! reader Kimon discovered the debate over Net Neutrality is far from over when alerting us to a strong rebuke of the net policy in a number of newspapers published regionally by GateHouse Media.

Macedon, N.Y. resident Cheryl Miller doesn’t like the federal government involving itself in the Internet, and considers the “physical part of the Internet” the private property of Internet Service Providers:

When a progressive liberal takes up a cause, you can bet he’s found another way to undermine someone else’s liberty. The issue of “net neutrality” is a prime example of this rule.

The concept of net neutrality has piggybacked into recent public interest stories about groups with high-minded names like Free Press and Public Knowledge — stories about Internet-assisted food, clothing and book drives for the needy around the world, and other such humanitarian and environmental endeavors. It is sneakily implied that the success of such undertakings are the result of net neutrality principles, but they are not.

[...] Proposed net neutrality legislation would prohibit ISPs from charging different rates for various types of content or services, such as is done with cable and satellite television (think pay-per-view and premium channels). Restricting ISPs from operating in profitable ways is a disincentive to invest in more bandwidth to better serve customers, and likewise discourages innovations that could benefit consumers. More regulation will result in less profit, less competition, higher prices and a stunted Internet.

For Miller, any government policy that interferes with AT&T, Verizon, and Comcast’s view of how the Internet should be ordered amounts to a government takeover of the Internet, especially when the government can tell providers they cannot prioritize traffic or charge customers different prices to access different content.

Here at Stop the Cap!, we were unimpressed with Miller’s arguments and partisan cheap shots, especially at the expense of public policy groups like Free Press and Public Knowledge.  Perhaps she does not realize conservative groups like the Christian Coalition of America are also supporters of Net Neutrality.  But we don’t necessarily blame her either, considering all of the money being spent by corporate-funded groups to distort Net Neutrality’s ultimate goal: to ensure the same formula that made the Internet a runaway success is kept firmly in place.

Our formal response appeared in the same newspapers this afternoon:

At least 20 percent of Canadians lack Internet access, according to a new survey published by Statistics Canada.  That means one out of every five homes either cannot afford, don’t want, or can’t get online.

The lack of access is most acute in low income households, where only about half with incomes of $30,000 or less access the Internet.  The income and access disparity was readily apparent when comparing broadband rich, income poor New Brunswick (70% have broadband) with service-deprived British Columbia, which has an 84% penetration rate.  In NB, you can get it but you can’t afford it; in BC if you can get it, you already have it.

Although cities in southern Canada are well-wired, smaller communities further north are often not, and the access some get is slow and unreliable.  But few are willing to live with dial-up access.  At least 96% of Canadians rely on broadband or simply go without the service.  The Canadian Radio-television and Telecommunications Commission has set a goal to deliver at least 5Mbps broadband service to every interested Canadian by the end of 2012.

Some statistics, starting with those without Internet service:

• 56% lacked interest or need;
• 20% cited the cost of the service;
• 15% don’t have access to a computer;
• 12% don’t understand enough about computers or the Internet to use it;
• 93% of households with children had Internet access while just 58% of single-person homes had the service;
• 81% of urban homes had access to broadband, just 71% of rural homes do;
• 71% of Canadians access the Internet from a traditional desktop computer, 64% use a laptop, 35% use a tablet or smartphone for access, and just 20% rely on a video game console to get online.

Statistics Canada surveyed 30,000 Canadians as part of its research.

Shaw's wallet-biting usage billing shark finally gets the net, at least for some of the company's broadband plans.

After a firestorm of protests from customers across western Canada, Shaw Communications this week unveiled new Internet packages and pricing that dramatically increases usage allowances and introduces unlimited use plans.  Stop the Cap! reader Mark shares the good news that consumer pushback can make a difference:

Today we are excited to share our new direction on Internet pricing and packaging with you, our customers. With your help, we’ve created a model that we hope you’ll agree is fair, flexible and offers a variety of options for customers today and into the future.

We’d like to thank the hundreds of customers who took time to come out to the 34 sessions and those who shared their ideas online. Many of those who participated are the technology innovators who told us they wanted an Internet experience that worked not only today, but for the needs of tomorrow. We also heard that our customers wanted transparency, more choice of internet speed and data options, increased flexibility to meet their varied needs, and above all, fairness.

The decisions we have made coming out of those sessions are far reaching. We went into the session thinking it was a discussion about pricing and packaging, and came out with a new vision for the future.

One of the biggest decisions we have made is to undertake a major upgrade of our network by converting our television analog tiers to digital. In making this move we will triple the capacity of our network, freeing up space for more Internet, HD and On Demand programming. This conversion will start in June and will take sixteen months to complete. As a result of this upgrade, it will open up opportunities for Shaw to offer industry leading broadband performance.

While it is unlikely many Shaw customers clamored to see the cable company convert to an all-digital system (which requires a set top box on every connected television), the aggressive move to expand DOCSIS 3 technology will provide Shaw the option of pitching faster Internet speeds to customers — exactly what they intend to offer:

1. Increased Data Consumption with our Existing Model: Customers can choose to stay with their existing packaging and pricing except with much higher data levels. Our existing acceptable use policy will remain the same as it is today.
   

   Package	Speed	Current Data	New Data	Bundle Price	Standalone Price	With Personal TV (SPP)
   Shaw Lite Speed	1 Mbps	15 GB	30 GB	$27	$37	$64.90
   Shaw High Speed	7.5 Mbps	60 GB	125 GB	$39	$49	$74.90
   Shaw Extreme	25 Mbps	100 GB	250 GB	$49	$59	$84.90

2. New Broadband Packages: We have created new packages featuring industry leading performance and greater value. These broadband packages will come bundled with TV and will roll out in two phases. Phase 1 will be available in June, 2011 and Phase 2 will become available as the network upgrade occurs. Our advanced digital network will be activated neighbourhood by neighbourhood over the next 16 months starting in August, 2011.Customers who choose one of the new packages will enter into an automatic upgrade program. Those who go over their data consumption will be placed in the next higher package for the remainder of the month. The following month’s data will be reset and customers will return to their original package unless they choose to stay at the higher level.We have also created unlimited data options for our customers, an Unlimited Lite and Unlimited 100. As the new network becomes available, we will also offer Unlimited 250.
3. Phase 1 Broadband Packages (Available June, 2011)
   

   Package	Download Speed	Upload Speed	Data	With Legacy TV	With Personal TV (SPP)
   Unlimited Lite	1 Mbps	256 kbps	Unlimited	Add $59.00	$84.90
   Broadband 50	50 Mbps	3 Mbps	400 GB	Add $59.00	$84.90
   Broadband 100	100 Mbps	5 Mbps	500 GB	Add $69.00	$94.90
   Broadband 100+	100 Mbps	5 Mbps	750 GB	Add $79.00	$104.90
   Unlimited 100	100 Mbps	5 Mbps	Unlimited	Add $119.00	$144.90

   Phase 2 Broadband Packages (Rolling Launch Starting August, 2011)

   Package	Download Speed	Upload Speed	Data	With Legacy TV	With Personal TV (SPP)
   Unlimited Lite	1 Mbps	256 kbps	Unlimited	Add $59.00	$84.90
   Broadband 50	50 Mbps	5 Mbps	400 GB	Add $59.00	$84.90
   Broadband 100	100 Mbps	10 Mbps	500 GB	Add $69.00	$94.90
   Broadband 100+	100 Mbps	10 Mbps	750 GB	Add $79.00	$104.90
   Broadband 250	250 Mbps	15 Mbps	1 TB	Add $99.00	$124.90
   Unlimited 250	250 Mbps	15 Mbps	Unlimited	Add $119.00	$144.90

While this represents a welcome change for Canadians long weary of stingy usage allowances, the pricing for the company’s unlimited use options is on the high side, and is not an available option for the most popular lower speed tiers, with the exception of the company’s 1Mbps “Lite” plan, where it carries a ludicrous monthly fee of $59, the exact same price customers will pay for a 50Mbps plan with a 400GB monthly limit.

We would have liked to see Shaw introduce unlimited options for all of their usage plans (or better yet simply drop the limits altogether).  As it stands, they are effectively charging an extra $20-40 a month to be free from a usage cap on some of their new highest speed tiers. For most customers, the effective result of Shaw’s changes is a more generous usage package.

Shaw’s pricing for high speed plans is aggressive.  For what Americans would pay Time Warner Cable for 50/5Mbps service, a Shaw customer will eventually get 250/15Mbps with a 1TB limit (add $20 for unlimited).

Michael Geist, a University of Ottawa law professor, suspects the looming hearings by the Canadian Radio-television and Telecommunications Commission (CRTC) over usage-based-billing has a lot to to with this week’s changes by Shaw, which just months earlier was lowering usage allowances.

“Shaw is doing this because the writing was on the wall,” Geist says. “When you’re in a position to offer such better pricing and data caps than what you were offering before, it highlights just how uncompetitive this market has been.”

Eastern Canadians in Ontario and Quebec will be waiting to see what companies like Rogers, Videotron, and Bell do in response to Shaw’s new pricing model.  As it stands, western Canadians will nearly get double the speeds and usage allowances those in the eastern half of the country endure from cable and phone companies.  That could be a political nightmare at the CRTC hearings, and would continue to call out the highly arbitrary nature of Internet Overcharging, whether it is found in Calgary, Toronto, or Montreal.

If you paid your Verizon Wireless bill on Verizon’s website anytime from May 7 to May 13, you may now be at risk of identity theft. The company’s website was not hacked or compromised, but customers who used computers without adequate anti-virus protection may have fallen victim to a banking trojan that collected personal and banking information and sent it on to points unknown.  WSYR-TV in Syracuse delivers the bad news.  (2 minutes)

WFTS-TV in Tampa launched a consumer investigation when a local customer noticed the Verizon FiOS Internet service he was paying for — 25/25Mbps — was actually only providing him with 2.88Mbps upload speeds.  Even worse, both providers in the Tampa Bay area — Bright House Communications and Verizon, say actual speeds are not guaranteed, leading at least one customer to file an official complaint with the Federal Communications Commission for false advertising and misrepresentation by Verizon Communications.  WFTS examines whether providers have to actually deliver the speeds they promise, or does the fine print get them off the hook, leaving you paying more than you should for Internet speeds you are not getting.  (3 minutes)

Vermont officials this month are learning broadband maps purporting to represent widespread availability of high speed Internet access across the state are much less accurate than originally thought.  Now into its second week, the BroadbandVT project to identify service gaps and collect actual broadband speeds is showing a chasm between provider claims and actual broadband reality on the ground for the state’s 625,000 residents.

Vermont’s broadband service availability map was originally reliant on service providers voluntarily contributing data about where service was available — data that has rapidly found to be faulty as Vermont residents report their actual broadband experiences to the state’s website.

The state’s Broadband Mapping Team used data from a phone survey conducted in January by the University of Vermont-Center for Rural Studies to verify providers’ claims of broadband availability.  On May 12, state officials reported that their provider-inspired maps were not accurate, and officials wanted residents to help verify coverage.

“I’m bound and determined to have Vermont connected by 2013 — high-speed Internet and cell service to every last mile. One of our challenges is that we don’t have information that we can trust about who has service and who doesn’t,” Gov. Peter Shumlin said. “So we need Vermonter’s help, so we can figure out where to go. So we’re urging Vermonters to use our new website to help us get truth about your service in your home or business.”

In similar cases Stop the Cap! has followed, the biggest sources of inaccurate data turn out to be telephone companies and wireless providers.  Phone companies like FairPoint Communications may advertise DSL available in certain communities, but be unable to actually provide the service to every household due to the distance between the central telephone exchange and the customer’s home, or because of deteriorated infrastructure.  Wireless providers often theorize where service should be available, but real world experience proves otherwise.

FairPoint told the Brattleboro Reformer the phone company intends to do much better delivering DSL to Vermont residents in the coming weeks.  The company claims it already provides DSL access to 82 percent of the state and intends to increase that number considerably higher in June.

“We have a plan with the state to bring total broadband coverage to half of our telephone exchanges in the state, so that’s the first three digits of your phone number. Ninety-five percent of that will be done in the next six weeks,” said FairPoint spokeswoman Sabina Haskell.

Vermont residents appear to be enthusiastic participants in the project, with 1,500 visitors a day using the website’s broadband maps and taking speed tests to share results with the state, who can compare them against providers’ speed claims.

Vermont’s expansion of broadband service is a state priority, and directing resources to areas of need has proved critical as the state receives and spends broadband stimulus funding.  Crowdsourced maps can expose exaggerated claims of broadband availability or confirm them as accurate.  The state intends to update its maps regularly based on data it receives, all part of an initiative to deliver 100 percent broadband coverage across the state.

WPTZ-TV in Plattsburgh explores Vermont’s new initiative to bring broadband to 100 percent of the state’s residents.  (2 minutes)

WPTZ-TV also reports on the state’s new website to verify broadband mapping data and speed claims made by the state’s phone and cable companies.  (3 minutes)

The People’s Republic of China is accelerating its deployment of fiber optic broadband at the expense of DSL, according to a new report from market research firm Infonetics Research.

“The major story in the broadband aggregation equipment market this quarter is the dramatic drop in DSL ports in China, which points to operators there continuing their dramatic shift away from DSL,” said Jeff Heynen, directing analyst for broadband access at Infonetics Research.  “The first quarter is typically one of the slowest for DSL, but the seasonal effect was worsened by Chinese operators’ continued shift away from traditional [DSL].”

The Chinese broadband market is increasingly based on fiber networks, especially in larger cities where broadband demand is rapidly increasing. Worldwide spending on advanced broadband networks is being driven by broadband expansions in China, Japan, and Korea — all accelerating their fiber deployments. For Chinese companies like Huawei and ZTE, the news is both good and bad.  Both companies profited from sales of EPON and GPON equipment which help power fiber networks, but lost plenty from the decline in spending on DSL technology.

The North American market has stalled, and is expected to remain in neutral until Verizon decides to re-initiate its FiOS buildout.  Broadband stimulus funding may also help boost spending, but most providers are relying on slow speed DSL to introduce rural America to broadband service.  In markets where providers are delivering fiber to the home, companies like Calix are reaping the rewards, with revenue up 222 percent this quarter, mostly earned from sales of Ethernet Fiber to the Home equipment.

Nevermind. We'll resell Sprint instead.

Back in January 2010, Cox Cable announced it was getting into the cell phone business with an ambitious plan to construct its own competing wireless network.  Cox used their little spacemen to market their forthcoming alternative as delivering “unbelievably fair” pricing and terms for cell phone service.  The bigger players were selling bait and switch plans with high extra charges and bill shock at the end of the month, or so Cox’s ads suggested.

Now, the cable company has announced it is pulling the plug on its partially constructed 3G network, and will rely exclusively on reselling Sprint service.

“We believe this approach is good for our customers, allowing us to take the necessary steps to fulfill our promise to deliver a Cox experience that customers expect from us,” read a statement from Cox.

What happens to Cox’s existing infrastructure, and the frequencies it won at auction in 2008, is unknown.

Although the reasons for the change of heart are not officially known, there is speculation in the investment community Cox’s expensive launch of 3G technology would be outdated just as larger providers were unveiling newer 4G networks.  Additionally, the dynamics of the market are increasingly trending towards a duopoly, especially after AT&T announced its intentions to acquire T-Mobile.

Two major carriers will provide service to the vast majority of Americans if the merger is approved.  That would leave Cox in a difficult position attracting investment to build its own network and interest from consumers looking for the latest and greatest smartphones Cox couldn’t sell.

Sprint’s wholesale division has allowed several providers to resell Sprint’s network, no capital investments required.  Cox had already been relying on Sprint for providing cell phone service in several markets.

Cox Wireless’ marketing campaign promised “unbelievably fair” pricing on its own wireless network.  Now it will resell Sprint’s network instead. (2 minutes)

Unlimiting the ways a cell phone company can limit your service.

MetroPCS pitches its 4G/LTE plans to customers looking to save money over the bigger players in the marketplace.  The upstart provider, based in Richardson, Texas, serves just over a dozen major metropolitan areas with no-contract plans that deliver lower prices in return for smaller coverage areas.  As larger providers heavily sell their “next generation 4G” networks, MetroPCS has also been promoting their own “unlimited talk, text, and web” 4G/LTE plan that offers an “unlimited” experience for $60 a month.  But there is a catch, only revealed when customers click the fine print link that opens the Terms of Use.  The document is a poster child for Net Neutrality, because it allows the company to block, throttle, prioritize, alter, or inspect any web content.

Here is what MetroPCS advertises:

Here is a selection of the Terms and Conditions which tarnish a great sounding deal (underlining ours):

You acknowledge and agree that the Internet contains Data Content which, without alteration, will or may not be available, or may not be providable to you in a way to allow a meaningful experience, on a wireless handset.

You acknowledge and agree that such alteration that MetroPCS may or will perform on your behalf as your agent may include our use of Data Content traffic management or shaping techniques such as, but not limited to delaying or controlling the speeds at which Data Content is delivered, reformatting the Data Content, compressing the Data Content, prioritizing traffic on MetroPCS’ network, and placing restrictions on the amount of Data Content made available based on the Agreement. You further acknowledge that MetroPCS may not be able to alter such Data Content for you merely by reference to the Internet address and therefore acknowledge and agree that MetroPCS may examine, including, but not limited to Shallow (or Stateful) Packet Inspection and Deep Packet Inspection, the Data Content requested by you while using the MetroWEB Service to determine how best to alter such Data Content prior to providing it to you.

If we notice excessive data traffic coming from your phone, we reserve the right to suspend, reduce the speed of, or terminate your MetroWEB Service. In addition, to provide a good experience for the majority of our customers and minimize capacity issues and degradation in network performance, we may take measures including temporarily reducing data throughput for a subset of customers who use a disproportionate amount of bandwidth; if your web and data Service Plan usage is predominantly off-portal or otherwise not provided by MetroPCS during a billing cycle, we may reduce your data speed, without notice, for the remainder of that billing cycle. We may also suspend, terminate, or restrict your data session, or MetroWEB Service if you use MetroWEB Service in a manner that interferes with other customers’ service, our ability to allocate network capacity among customers, or that otherwise may degrade service quality for other customers.

MetroPCS also wants customers to know their service is not intended as a home broadband replacement, and states it is only to be used for basic web services, including e-mail and web browsing and downloading of legitimate audio content.  Video streaming is naughty.