Pacific Fibre's planned undersea fiber optic cable set to begin service in 2013. (click to enlarge)

Australia and New Zealand remain the two countries most notorious for Internet Overcharging schemes like usage caps and speed throttles.  The lack of international broadband capacity is routinely blamed for limiting broadband usage for consumers in both southern Pacific countries, and now a major undersea fiber optic cable project seeks to end those Internet Overcharging schemes once and for all.

Pacific Fibre hates usage caps.  The company, which is one of the partners in a planned 5.12 terabits per second undersea cable connecting the United States with New Zealand and Australia, believes limiting broadband consumption is bad for business — theirs and the digital economies of both nations.  Now the company is reportedly willing to put its money where its mouth is, charging broadband providers a flat rate per customer for unlimited access to its backbone network.

The company believes such pricing will force providers into selling more generous, often unlimited broadband service packages for businesses and consumers.  Providers have routinely blamed insufficient international capacity for restrictive data caps.  But increasing capacity, including Pacific Fibre’s new cable set to begin service in 2013, removes that excuse once and for all.

Co-founder Rod Drury believes there will be so much capacity, if providers continue to engage in Internet Overcharging schemes, most of the newly available bandwidth could actually go unsold.

“Why don’t we flip the model around and go to a per-person charging model and then try to give internet providers as much bandwidth as we possibly can for that?,” Drury told BusinessDay.  “The charges could be segmented by customer type; you could do it for mobile connections, home connections, schools, hospitals and businesses, and set a reasonable price.”

CNBC talked with Pacnet CEO Bill Barney, one of the partners in the Pacific Fibre project, about bandwidth needs in Asia and how new undersea fiber cables will meet the growing demands.  (Segment one of the interview was done in June, segment two in July.)  (10 minutes)

Telecommunications Users Association chief executive Ernie Newman said Drury’s idea was long overdue. “The way the world is moving is towards all-you-can-eat-type plans and any move like that has got to be the way of the future.”

But one of Pacific Fibre’s competitors, Southern Cross, which currently provides undersea fiber connections for South Pacific Internet Service Providers, said he wasn’t sure Drury’s idea would work.

Southern Cross marketing director Ross Pfeffer said broadband providers haven’t been justified limiting broadband usage for some time, as newly available capacity has already helped ease the bandwidth crunch.  Instead, critics contend existing providers don’t want to give up the massive profits they are earning limiting usage, maximizing revenue from users who think twice before using high bandwidth services, thus reducing required investments in network upgrades.

“New Zealand internet providers [are] using data caps to segment the retail market and maximize their own revenues,” Pfeffer noted.

Both Australia and New Zealand are embarked on National Broadband Plans to take back some control of their broadband futures from private providers many accuse of monopolizing an increasingly important part of both countries’ digital economies.

Drury’s project, and others like it, may become important components of newly constructed national fiber-to-the-home projects proposed in Australia, and dramatically improved service in New Zealand.

The history of deploying underseas cables is a fascinating one.  Check out this 1936 documentary showing how AT&T made undersea phone cables to connect the San Francisco Bay area.  Back then, companies didn’t use rubber or plastic cable jackets to keep the water out.  They used jute fiber and paper!  Some other companies used gutta percha, which is today best known for root canal fillings, or tar mixtures.  (5 minutes)

http://www.phillipdampier.com/video/BBC Cable Under the Sea.flv

Before there was telephone service, the challenges of connecting the far flung components of the British Empire were met by underseas telegraph cables beginning in the 1870s.  A fascinating BBC documentary visited Porthcurno, located at the tip of Cornwall, England, where 14 undersea telegraph cables stretched from a single beach to points all around the globe. Then something called “wireless” arrived and threatened to ruin everything.  (8 minutes)

http://www.phillipdampier.com/video/Fiber Optic Cable.flv

But what exactly is “fiber optic cable” and how is it made?  More importantly, how do they store thousands of miles of fiber optic cable on a single ship, ready to drop to the bottom of the ocean?  The answers to both are here.  (12 minutes)

Time Warner Cable faces an increasing number of subscribers cutting their cable television service off, choosing to watch their video entertainment online.

Now the nation’s second largest cable company is trying to mitigate the potential damage with a series of new applications designed to bring cable television and your computer, cell phone, and iPad together.

Time Warner is getting started with the iPad, developing an application that will help cable subscribers remotely control their DVR cable box to record and manage programming.  Away from home and want to scan a program guide and record an upcoming show?  The new app will let you do it.  Need to grab some video on-demand from Time Warner?  Not a problem.  You can even start watching on your iPad and pick up where you left off from your home.

Integrating the many devices consumers use as part of their daily lives with cable television could bring the cable viewing experience back front and center among at least some subscribers.  That reduces the chance customers will decide they can do without cable TV.  Since most of Time Warner Cable’s on demand library will only be available to current cable subscribers, cutting cable’s cord also means an end to online on-demand viewing of cable-licensed programming.

Time Warner Cable's prototype iPad app

Time Warner Cable CEO Glenn Britt has repeatedly emphasized his interest in delivering cable services the way customers want, and claims the new generation of applications on the way from the cable company will provide just that.

Although Time Warner will start with the iPad, the application will quickly become available for the iPhone and iPod Touch series.  Additionally, versions for other smartphones as well as portable and home computers will soon follow.

Ironically, this integration process could drive data volumes on Time Warner Cable’s broadband network to new heights.  Video streaming alone will dramatically increase traffic.  Yet the same company that is ready and willing to provide these bandwidth-intensive services also complained about existing broadband customers “using too much” of their existing broadband service.  In the spring of 2009, the company sought to implement a 40GB usage limit on some its broadband customers and charge up to three times more — $150 a month for unlimited access.  At the time, Britt and other company officials blamed the burden of online video and other usage-intensive applications for spiking the demand on their network.

Customers may wonder whether Britt’s new enthusiasm for online video means he recognizes their network has plenty of capacity to support unlimited access or is looking for a new excuse to justify a return to Internet Overcharging schemes.

Time Warner Cable CEO Glenn Britt, CTO Mike LaJoie, VP of Web Services Jason Gaedtke and Director of Digital Communications Jeff Simmermon ponder their prototype iPad app and discuss the implications of integrating cable TV with other electronic devices.  For Time Warner Cable, it’s a matter of preserving cable TV subscribers who might contemplate cutting the cable TV cord and watching everything online.  (13 minutes)

Your Friendly Internet traffic cops Time Warner Cable and Comcast paid for research that suggests those Internet speed slowdowns are your fault (or at least not theirs).

A study from MIT suggests that broadband speed test results that show “real world” broadband speeds far below what your provider promises are actually better than you think, and if they’re not — it’s not your provider’s fault.  The paper, Understanding Broadband Speed Measurements, finds slow Internet speeds are often your problem, because you run too many applications on your computer, visit inaccurate speed measurement sites, use a wireless router, or have run into an Internet traffic jam outside of the control of your ISP.

The research comes courtesy of MIT’s Internet Traffic Analysis Study (MITAS) project, financially backed by some of North America’s largest cable and phone companies — Clearwire, Comcast, Liberty Global (Dr. John Malone, CEO), and Time Warner Cable in the United States, Rogers Communications and Telus in Canada.  Those providers also deliver much of the broadband speed data MITAS relies on as part of its research.  Additional assistance came from MIT’s Communications Futures Program which counts among its members Cisco, an equipment manufacturer and promoter of the “zettabyte” theory of broadband traffic overload and cable giant Comcast.

The study was commissioned to consider whether broadband speed is a suitable metric to determine whether an ISP provides good or bad service to its customers and if speed testing websites accurately depict actual broadband speeds.  Because Congress and the Federal Communications Commission have set minimum speed goals and have expressed concerns about providers actually delivering the speeds they promise, the issue of broadband speed is among the top priorities of the FCC’s National Broadband Plan.

“If you are doing measurements, and you want to look at data to support whatever your policy position is, these are the things that you need to be careful of,” Steve Bauer, technical lead on the MIT Analysis Study (MITAS) told TG Daily. “For me, the point of the paper is to improve the understanding of the data that’s informing those processes.”

Bauer’s 39 page study indicts nearly everyone except service providers for underwhelming broadband speeds:

While a principal motivation for many in looking at speed measurements is to assess whether a broadband access ISP is meeting its commitment to provide an advertised data service (e.g. “up to 20 megabits per second”), we conclude that most of the popular speed data sources fail to provide sufficiently accurate data for this purpose. In many cases, the reason a user measures a data rate below the advertised rate is due to bottlenecks on the user-side, at the destination server, or elsewhere in the network (beyond the access ISP’s control). A particularly common non-ISP bottleneck is the receive window (rwnd) advertised by the user’s transport protocol (TCP).

In the NDT dataset we examine later in this paper, 38% of the tests never made use of all the available network capacity.

Other non-ISP bottlenecks also exist that constrain the data rate well below the rate supported by broadband access connections. Local bottlenecks often arise in home wireless networks. The maximum rate of an 802.11b WiFi router (still a very common wireless router) is 11mbps. If wireless signal quality is an issue, the 802.11b router will drop back to 5.5mbps, 2mbps, and then 1 mbps. Newer wireless routers (e.g. 802.11g/n) have higher maximum speeds (e.g. 54 mbps) but will similarly adapt the link speed to improve the signal quality.

End-users also can self-congest when other applications or family members share the broadband connection. Their measured speed will be diminished as the number of competing flows increase.

The study also criticizes the FCC for relying on raw speed data that does not take into account the level of service being chosen by a broadband customer, claiming many service providers actually deliver higher speed service than their “lite” plans advertise.

In short, it’s everyone else’s fault (including yours) for those Internet speed slowdowns.

Ultimately, the report’s conclusion can be summed up in three words: change the subject.  It’s not slow broadband speeds that are the problem — it’s the lack of understanding about what you can accomplish with the speeds you do get from your ISP:

In the next few years, as the average speed of broadband increases, and the markets become more sophisticated, we expect that attention may shift towards a more nuanced characterization of what matters for evaluating the quality of broadband services. Issues such as availability (reliability) and latencies to popular content and services may become more important in how services are advertised and measured. We welcome such a more nuanced view and believe it is important even in so far as one’s principal focus is on broadband speeds.

One thing the paper does effectively deliver at top speed are industry talking points, particularly the one that says less regulation is better (underlining ours):

Our hope is that progress may be made via a market-mediated process that engages users, academics, the technical standards community, ISPs, and policymakers in an open debate; one that will not require strong regulatory mandates. Market efficiency and competition will be best served if there is more and better understood data available on broadband speeds and other performance metrics of merit (e.g., pricing, availability, and other technical characteristics).

These kinds of research reports are often tainted by the industry money that pays for them.  Researchers and universities routinely deliver industry-pleasing, sober-sounding studies in return for considerable financial contributions, grants, and other forms of underwriting.  This report lacks full disclosure about who is helping to pay for it — North America’s largest cable operators, who also deliver much of the data MITAS relies on for their research.

Ask yourself how much longer these companies would be writing checks to MIT had they delivered a report implicating them in false advertising of speeds they do not deliver or for relying on inadequate upstream providers to handle their Internet traffic?  The report pulls any and all punches delivered to the companies who finance it — a clear sign of bought-and-paid-for research in action.

More dollar-a-holler advocacy for AT&T in the pages of CNET. AT&T brings the money, lobbyists ride their former credentials to deliver exactly the "facts" AT&T wants to read.

CNET last week shamefully handed over column space to a barely-disclosed AT&T lobbyist trotting out the latest unfounded, anti-consumer nonsense: tiered data plans help bring broadband to the poor.

It’s all part of AT&T’s Re-education campaign to sucker convince Americans that paying more for less service is a good thing:

New analysis shows that as Internet providers ramp up their investments to accommodate the surge in bandwidth demand, the old, one-price-for-everybody model would slow our progress toward universal adoption, especially by lower-income Americans.

The first reaction of many Internet users to this news may well be disbelief. How can it be that a pricing approach that has worked so well for so many years can suddenly become obsolete and even counterproductive? The answer is that technological advances have changed what many of us do online, which, in turn, has changed the economics.

A techno-ecosystem once dominated by e-mail and text now is increasingly characterized by high-definition video that claims up to 1,000 times as much network capacity and bandwidth as simple text. The way we currently pay for the infrastructure required to keep the network humming also will have to change.

The only humming we hear is AT&T’s dollar bill-counting machines.

When at first you don’t succeed, try, try again.  Robert J. Shapiro and his co-author Kevin Hassett’s latest work, “A New Analysis of Broadband Adoption Rates By Minority Households,” is simply a rehash — spoiled leftover bologna — of their last bought-and-paid-for-study we analyzed last fall.  Both reports are tailor-made to appeal to the minority-interest groups that are part of AT&T’s Rainbow Coalition of Cash — groups that engage in dollar-a-holler advocacy of AT&T’s agenda while quietly depositing their substantial contribution checks.

The report assumes quite a lot:

• That broadband service adoption rates in minority communities are too low because heavy users are artificially keeping broadband prices too high;
• That without tiered data plans, AT&T can never afford to expand broadband service;
• That unlimited broadband tiers can never co-exist with tiered plans — it’s one-size-fits-all under today’s bad pricing model;
• That a grand exaflood is coming to swamp broadband users of all kinds, and without tiered pricing to finance upgrades, we could all drown.

For the second time, Shapiro and Hassett try to stick the bill for upgrades on so-called “heavy users,” who they suggest should pay 80 percent of the upgrade costs through higher priced broadband service.  They also want content producers to cough up — the “they can’t use my pipes for free”-argument AT&T loves.

How will customers react to paying huge surcharges on their broadband bills?  According to the report’s authors, heavy users won’t mind because they are “price-insensitive.”

Ask Time Warner Cable customers in New York, Texas, and North Carolina if they minded the prospect of paying $150 a month for broadband service they used to pay $50 a month to receive.  How about Frontier’s customers in Mound, Minnesota asked to pony up $250 a month for up to 3Mbps DSL service because they exceeded Frontier’s 5GB monthly usage allowance?

The report has several other glaring fact-gaps:

• Tiered service plans are already available industry-wide, based on broadband speed, not usage.  Low income customers can obtain cheaper broadband today, if companies decide to advertise it;
• The wounds from high broadband pricing are industry self-inflicted.  They charge $40 or more for a service their financial reports suggest costs less than $10 a month to provide;
• Providers can achieve universal broadband first by extending existing networks to rural America, upgrading them to fiber as the economy of scale from urban and suburban upgrades forces prices down;
• The authors strenuously avoid reviewing providers’ financial reports which show enormous profits even as costs continue their rapid decline;
• Many of the footnotes used to back their arguments turn out to quote self-interested parties like service providers, equipment manufacturers, and trade associations.

None of this is surprising or new in bought-and-paid-for-reports commissioned by companies to cheerlead their corporate agenda.  The last thing AT&T wants to read is a recitation of facts that disprove their arguments.

In essence, Shapiro and Hassett are arguing (with a straight face) that if providers are allowed to charge some consumers dramatically higher prices for broadband service, it will somehow convince them to upgrade their networks -and- trickle down lower prices for economically-challenged consumers.

Maybe if we let BP drill more oil wells in the Gulf, the extra profits they earn will somehow lead to better safety records for drilling and lower gas prices.  After all, with those record-busting profits earned over the past three years, the safety record for the industry is better than ever and gas is sold at fire sale prices, benefiting economically disadvantaged Americans, right?

If you or I argued this theory, we’d be drug tested.  For corporate lobbyists, it’s just another day at the office.

Here’s just how silly this really is:  You just discovered your hard drive is nearly full.  You’ve gone shopping for an upgrade, planning to spend around $100 for a new drive.  Just a few years ago, you spent around that much for a 120GB model.  Today, that same $99 would today buy you a 1.5 terabyte drive, unless you bought it from AT&T.  They want $1,500.

Newegg's price: $99.95 -- AT&T's price: $1,500

You: “Why is this drive so expensive?”

AT&T: “Over 90 percent of our customers never need a drive bigger than 120 gigabytes.  Developing a 1.5 terabyte drive costs plenty, and we feel that because you are a heavy user, you should bear the brunt of the development and manufacturing costs of all hard drives.”

You: “Sure, but this same 1.5TB drive is available in Korea for $99 dollars.  You want $1,500.  Why is there such a price difference and when does your price come down?”

AT&T: “Poor people in Korea and America can’t afford even a 60 gigabyte drive.  We are trying to make smaller drives more affordable  so in turn you should pay a higher price.  This isn’t about when AT&T will lower our price, it’s about when you will see our grand charitable vision and lower your selfish expectation of a lower price.”

You: “Wow, a corporation with socially-conscious pricing to benefit the poor?  So you are telling me that when I spend $1,500 on this hard drive, it is going to subsidize the cost of their 60 gigabyte drive, right?”

AT&T: “No, not exactly.  See, if we didn’t charge you $1,500, we’d have to raise the price on their 60 gigabyte drive and that’s not fair because they don’t need to store as much as you do.”

You: “But wait, your ‘subsidized’ 60GB drive costs three times more than what Koreans spend for a drive at least three times larger.”

AT&T: “That’s because the standard of living is different there.  Besides, why do you want to make the poor pay for your hard drive?”

You: “You aren’t making any sense.”

AT&T: “But we are about to make a whole lot of dollars!”

Dumping unlimited usage pricing only sets the profit expectations-bar higher for the broadband industry on Wall Street, regardless of what the true costs are to provide the service.  Wall Street never argues that excess profits should be spent on network upgrades and price subsidies to the poor — they want those profits paid to shareholders instead.

When the telecom industry is paying for your study, real facts never matter.  If you want them to do future business with your lobbying firm, the only acceptable conclusion is the one AT&T wants you to reach.

Tomorrow: Down the Sonecon rabbit hole

Mark Lowenstein was a vice president of strategy at Verizon Wireless, where helped set pricing for the carrier.

The key to turning America into a haven for Internet Overcharging schemes is Re-educating customers to accept that unlimited ‘isn’t fair,’ especially in wireless mobile broadband.

Mark Lowenstein, an industry analyst and commentator, has given his prescription to Internet providers just itching to slap usage limits and overlimit fees on consumers enjoying unlimited broadband service:  you have to Re-educate consumers to accept Internet Overcharging schemes as a “positive” rather than a “punitive” development.

Fierce Wireless, where Lowenstein’s ideas were published, left out the fact he was also a senior executive at Verizon Wireless.

Despite the billions in profits earned from today’s broadband marketplace, some in the industry want to banish “unlimited” from subscribers’ lexicons.  Sure it’s true that many companies’ investments in broadband expansion and upgrades have actually declined in the last few years, right along with the costs to provide the service.  But in a world where revenues in other parts of the business are drying up, someone has to make up the difference — you.

For AT&T, the decision was easy.  If you want the raging-popular iPhone, you’re going to need a two-year service contract and a data plan limited to 2 GB of usage per month.  Exceed that at your financial peril (or use a Wi-Fi hotspot and stay off our 3G network).  Don’t like it?  Too bad for you.  Where else will you find a subsidized iPhone?

Now that AT&T has thrown down the smartphone cap gauntlet, Lowenstein is ready to offer carriers advice on how to make their abusive pricing schemes go down better with consumers.  He wants everyone to take a crash course in computer science. Grandparents everywhere will come to understand the meaning of megabyte and get into the habit of contemplating how many of those will be eaten from usage allowances everytime they use their phones.

A key part of the transition to usage-based pricing is going to be educating users and the app development community about what a “megabyte” is, as well as developing more advanced tools and the right early warning systems to ensure wireless operators don’t end up testifying before Congress for Bill Shock, Part 2. U.S. consumers are accustomed to flat-rate pricing in all other aspects of their connected life: landline phone, wireless voice (increasingly), cable, broadband and so on.

Lowenstein considers AT&T Usage Estimator to be “nifty,” missing the irony of his own declaration that AT&T’s nasty cap means “moderate usage of anything multimedia gets you to 2 GB pretty fast.”  AT&T, he notes, also helpfully notifies customers they are about to bust through AT&T’s subjective definition of an appropriate usage allowance.

He concedes there are some “gray areas” — mere minutiae in AT&T’s greater scheme for fatter profits:

• New generation multitasking smartphones can run apps and other bandwidth-consuming features in the background, sometimes simultaneously, leading to exponential increases in data usage;
• The model of the “constant connection” means apps in the background exchanging data over the mobile network 24/7 could consume plenty of data, or perhaps not.  Few know for sure;
• Consumers are forced to pay for spam, advertising, unwanted file transfers and attachments, and other data not specifically requested;
• Family plan users now need to track something else on AT&T’s website — how much data their kids are using.  Remember the wars over cell phone voice calling plan overages and text messaging?  Wait.

In Lowenstein’s world-view, this all represents opportunity.

Among his suggestions:

1. Add special ratings to apps that are highly consumptive of content.
2. Provide notification before certain content downloads or heavy usage apps.
3. Provide a view into other family plan users.
4. Provide the option for sponsored content and value exchange.

That last one may prove to be the most controversial at all.  It assumes the Kindle model — where the content producer builds in the price of network consumption.  That would make AT&T’s day — forcing content producers to cough up money to deliver content over the same network AT&T already charges customers to access.  Who would turn down being paid twice for the same thing?  Lowenstein’s model allows for advertisers to defray part of the costs:

An advertiser or sponsor could pick up some of the network cost. Or the content publisher could bundle the price of data into the app. Users are comfortable with the “choice” model in the TV world: view it for free on broadcast or Hulu, with commercials; pay a monthly fee for the DVR service and skip the ads; or pay a premium to view that content on-demand, commercial-free.

That suggestion benefits AT&T enormously, but does nothing for content producers who can’t even sustain themselves with advertising.  Lowenstein suggests they should now seek out advertisers to remunerate AT&T?  The implications of wireless carriers deciding who gets the usage-cap-exempt content deal and who doesn’t opens a whole new Pandora’s Box.  It effectively allows a handful of companies to pick the winners and losers in the mobile broadband marketplace.  After all, if AT&T offered free videos on its own video portal but didn’t exempt other websites with the same video content, guess where users will choose to watch.

Lowenstein believes taking these kinds of steps will somehow insulate the wireless industry from charges it’s barely competitive, restricts too much, and charges even more.  Yet usage limits like AT&T’s, coming even as carriers enrich themselves with gotcha add-on plans and extra fees will speak far louder than AT&T providing customers a guide on how to be abused by the wireless carrier just a little less.

I also think how usage-based pricing is handled in wireless will be closely watched in the wired broadband world. Consumers have become accustomed to flat-rate pricing for unlimited data from their broadband provider. But with the exponential growth of video consumption, and the notion of more TV and movie programming being downloaded from or streamed via the Internet, usage-based pricing for certain types of content or highly consumptive customers might be coming to a broadband neighborhood near you.

The “unlimited” ride might be coming to an end, but there’s an opportunity to implement it in a positive, rather than a punitive, manner.

In spite of Lowenstein’s love of telecom industry talking points (hardly a surprise considering he works for that industry), his notions that consumers will accept increasing broadband bills even as the level of service provided is reduced makes him not only wrong, but hopelessly out of touch.

Time Warner Cable is offering mobile phone providers a solution to their clogged wireless networks — clog ours instead!

Business Week notes the cable company has been aggressively pitching its broadband network to cell phone companies in New York City, which can be used to transport cell phone calls and mobile data between cell towers and the providers’ operations centers.  The “backhaul” network cell phone companies rely on to move calls and data between the cell tower nearest you and your provider’s distribution network is often the source of the worst bottlenecks, especially when those networks are connected by standard copper telephone wiring, as many still are.

The more customers sharing a low capacity copper line, the slower your data speeds and greater the chance for dropped calls.  Although some providers have expanded their fiber capacity to reach busy cell towers, many more are still stuck with copper… until now.

Time Warner Cable’s offer to offload clogged cell phone networks onto the cable company’s broadband backbone has become extraordinarily profitable to the nation’s second largest cable operator.

In fact, it has become Time Warner Cable’s fastest-growing business after revenue tripled last year, Craig Collins, senior vice president of business services told Business Week.

We are talking $3.6 billion dollars in revenue in 2012 from wireless carriers alone, according to researcher GeoResults, Inc.

“Backhaul is a growth play that we are pursuing aggressively,” Collins said. “These mobile players want to get the bandwidth they need at a cost-effective price and our structure allows them to get that pretty seamlessly.”

U.S. smartphone use has grown almost 700 percent in four years, according to the U.S. Federal Communications Commission. Mobile-data volume is more than doubling annually as people use devices like the iPhone, BlackBerry and Google Inc.’s new Nexus One to send photos, watch videos and surf the Web. When networks jam, consumers face dropped calls and may find they can’t access Web pages or TV, analysts said.

The coming "exaflood" doesn't seem to worry Time Warner Cable, except when profits from consumers are at stake

Apparently the “exaflood” scare theory that suggests broadband networks are becoming hopelessly clogged does not apply to Time Warner Cable, because the company easily found plenty of free bandwidth in metropolitan New York City to profit from wireless phone traffic.

Not to be outdone, Comcast expects $1 billion from the wireless backhaul gravy train over time, according to its February 3rd conference call with investors.  Comcast is in a unique position to help ease congestion in San Francisco, where the cable operator provides service to some of the same customers who wander the city with Apple iPhones on AT&T’s overclogged Bay Area network.

Time Warner Cable CEO Glenn Britt doesn’t want to limit the potential revenue to just the wireless big boys — he wants to offer service to carriers large and small:

While Time Warner Cable declined to specify if AT&T, the lone U.S. carrier for the iPhone, is a customer, the New York- based cable company says it wants to sign carriers large and small. Chief Executive Officer Glenn Britt alluded to AT&T’s extra iPhone traffic in a December conference call.

“They want to get that into a cable as fast as they can,” Britt said, referring to overloads. His company began leasing backhaul in 2008 and posted $26 million in sales last year, less than 1 percent of the company’s total sales. Collins declined to give a forecast for 2010.

All this, of course, comes ironically to those Time Warner Cable customers who were subjected to Internet Overcharging experiments from Time Warner Cable just about one year ago.  Apparently, the exaflood only applies to consumers who face enormous broadband pricing increases and/or usage limits because of “overburdened” broadband networks.

Not so overburdened that the company can’t make room for billions in new earnings from cell phone companies, of course.

[Video Fixed!] Craig Moffett discusses wireless smartphone data usage trends and Time Warner Cable’s involvement in transporting mobile phone and data across its cable broadband network (5 minutes)

Mark Cuban

Mark Cuban has once again entered the debate over online video, Internet Overcharging schemes, and giant corporate mergers… and mangled it.

Cuban, who owns HD Net as well as the Dallas Mavericks basketball team, occasionally presents cable industry talking points on his blog, but quickly gets into trouble when he strays from them.

This time, Cuban is annoyed with Sen. Al Franken (D-Minnesota) over remarks the senator made about the proposed Comcast-NBC merger.  Cuban seized on comments by Franken that Comcast should put all of its television programming online.  Doing that, Cuban insists, would lead to higher prices for broadband and usage caps on it.

Where has Cuban been?  I realize the man is too wealthy to worry about the relentless rate increases Comcast and other companies force on consumers every year, but he also forgot Comcast already has a usage cap on its service, even before the feared video tidal wave arrives.

I get that no one really cares if Comcast has to spend money on capital improvements to add bandwidth to the home.  They should. Its pretty damn stupid to push consumption in a direction that will raise internet rates  to receive the same content for which there is already a phenomenal digital network in place to deliver that content.

Think about it for a minute Senator Franken. Comcast, and every large TV Provider has a digital network in place that can and does deliver gigabits of tv content perfectly,  every second of every day, to any TV set in any  home that is connected to their network. It works. Well.  What you are asking Sen Franken, is that Comcast duplicate the delivery of theirs and NBCUniversals shows on a network, the internet,  that is not, and has never been designed to handle the delivery of huge volumes of video and tv shows.

Cuban should be arguing that point with the cable industry.  TV Everywhere, the online video platform that will offer consumers access to “hundreds of TV shows and cable programming,” is their invention.  If Cuban’s fears are correct, why would the nation’s largest cable operators launch such an ambitious online video platform?

Cuban has bought into industry propaganda justifying usage caps.  There is always an excuse for rationing broadband service to boost profits.  First it was file sharing, now it’s online video causing the “serious problem” of customers using broadband service for more than just e-mail and web browsing.  Their solution – monetize it.  Usage caps and usage based billing are about preserving high profits, not protecting or increasing network capacity.  TV Everywhere proves that.

Franken does not advocate usage caps, as Cuban suggests.  The senator simply wants to be certain Comcast cannot act as a gatekeeper, determining who gets access to Comcast-NBC programming, and who does not.

Cuban should be welcome to such measures as a victim of Gatekeeper Abuse himself.  Mark, how many subscribers did you lose nationwide when Time Warner Cable unilaterally pulled the plug on your channels?

Phillip "My Essay Would Never Get Accepted" Dampier

Wonder where Time Warner Cable is spending this year’s rate increase?  Look no further than Time Warner Cable’s all-new Research Program on Digital Communications.

For a 25-35 page essay on the topics that interest Time Warner Cable’s lobbying and Re-education campaigns, the cable operator will fork over a whopping $20,000 “stipend.”

Why?  They get to use an ostensibly “independent” researcher from a major university or non-profit group to promote their agenda with the veneer of credibility.  It’s not Time Warner Cable that suggests Internet Overcharging schemes are warranted — it’s this researcher guy from a respected university who said so.  Net Neutrality should be opposed not because we have a vested interest in doing so, but because this non-profit group catering to a minority or disadvantaged group says it will harm their members.

Copies of the “dollar-a-holler” essays get spread around Washington to influence public policymakers and other legislative movers and shakers, and inevitably become talking points in the public policy debate.  Long forgotten is who paid for them.

What kinds of questions does Time Warner Cable want answers to?

• How are broadband operators coping with the explosive growth in Internet traffic? Will proposed limits on network management practices impede innovation and threaten to undermine consumers’ enjoyment of the Internet?
• How can policymakers harmonize the objectives of preventing anticompetitive tactics and preserving flexibility to engage in beneficial forms of network management?
• Regarding these issues, describe a vision for the architecture of cable broadband networks that promotes and advances innovation for the future of digital communications.
• How might Internet regulations have an impact on underserved or disadvantaged populations?

See below for my exclusive tips and strategies to help would-be applicants succeed in getting their essay proposals approved!

Some companies have paid stipends to researchers to consider market trends, new product possibilities, and be on top of the next biggest thing.  This isn’t that.

This “research program” is being overseen by Fernando R. Laguarda, Vice President, External Affairs and Policy Counselor at Time Warner Cable.  Laguarda joined Time Warner Cable last April from Wiltshire & Grannis LLP, a boutique law firm involved in telecommunications policy strategies as part of its practice.  The firm describes, among its strengths, a “first-rate understanding of the law and policy with a keen understanding of the political and public relations forces that shape public policy battles to help fashion innovative, winning strategies.”

Time Warner Cable admits he’s there to help Time Warner re-educate lawmakers and the public about Time Warner Cable’s agenda.  From their press release announcing his hiring (underlined emphasis ours):

Laguarda will play a significant role in helping the company develop and advance its policy positions, and will assume primary responsibility for working with third party policy influencers, including think tanks, academics, public interest and inter-governmental groups, and diversity organizations.

“Fernando is an accomplished attorney who comes to Time Warner Cable with a unique mix of experiences and he will bring a fresh perspective to the many policy issues we will be addressing,” said Steven Teplitz, Senior Vice President, Government Relations, adding “he knows our business extremely well and will play an essential role in helping to advance Time Warner Cable’s advocacy agenda.”

Time Warner Cable is taking a page from Verizon and AT&T, who back research “think tanks” and have contributed heavily to organizations that suddenly declare a burning interest in their corporate policy agendas.  Take a look at Broadband for America’s member roster for a review of how that game is played.

Time Warner Cable customers are probably wondering why they are paying for this.  After all, $800 a page for essays that “will provide new information, insights, and practical advice” is mighty pricey.

Ordinary consumers are not invited to apply.  Had we, my essay proposal would have been, “Time Warner Cable Should Stop Wasting Customers’ Money on Bought-And-Paid-For Essays and Instead Use the Money to Upgrade Their Network.”  I was even planning on including some nice graphs and charts and stuff.

I would remind the nation’s second largest cable operator it earns billions from selling broadband.  Instead of blowing $20k-an-essay down a Washington public policy rathole, it could instead spend it on solving their burning network management issues with simple, cost-effective upgrades that deliver better service to customers.

Since I don’t qualify — I’m just a Time Warner Cable customer, what do I know, I’ll be a giver and not a taker and share free advice with would-be applicants.

1. Since Time Warner Cable doesn’t want a breakdown of your expenses or need to know what you are going to do with the $20k, you are going to spend most of your time and effort first learning what policy positions the cable company wants you to parrot in order to improve your chances of being a big winner.  Remember, Time Warner isn’t going to give you the whole 20k upfront.  According to their FAQ, one half of the award ($10,000) will be issued at the start of the project.  The second installment ($10,000) will be made only after your advocacy essay is delivered.  There’s a built-in incentive to tow the line.

2. You can’t write on just any topic.  You have to write about one of the company’s pre-selected topics, which is why I’m out of the running for this already.  If you’ve been paying attention to the policy debates about Internet Overcharging, Net Neutrality, and Network Management, you are already half-way there!  You know what side of the issue the cable company is on, so don’t blow your chances by saying things like “a free and open Internet should never discriminate against the traffic carried on it,” or “at a time when the broadband industry earns billions in revenue and recently increased rates for customers again, the idea of implementing usage limits or usage based billing would make Tony Soprano awe at its audaciousness.”

Polly wants a stipend

(Statements in green keep you in the running.  Statements in red will likely get your proposal introduced to the circular file.)

• Reputable equipment manufacturers predict Internet growth so great, it threatens a vast “exaflood” which could bring the Internet to its knees.  Without wise network management and traffic control measures, just like those used on any big roadway, a cataclysmic global traffic jam is inevitable.
• Network Neutrality should be a given for any provider because no company wants to make money by slowing down someone’s content.  That would be like extortion — pay us or we put the brakes on you.
• Network management techniques guarantee your call from grandma will be crystal-clear, your movie download from your cable-partnered movie service will always play worry-free, and by organizing online traffic, Internet chaos is reduced.
• There is nothing wrong with cable companies colluding with one another to preserve the industry’s flexibility to manage its own traffic, even if it means putting some questionable, independently-owned traffic at the back of the line.  Nobody wanted to view that anyway.
  
• Today’s cable broadband provider is investing billions of dollars to improve network capacity and deliver customers an unparalleled online experience.  The cable industry has pioneered innovation in cable network programming they own, operate and distribute to assure quality and excellence.  Now, by taking that same formula for success to online content, and cutting out unnecessary middlemen, the industry can do for broadband what it created for cable television.  Now that’s a win-win for everyone!
• Internet regulations have unintended consequences.  It means providers have to funnel large contributions to interest groups, or place a company employee on a group’s advisory board, so that the industry can rest assured that groups with an interest in maintaining valued contributions will advocate anything we ask, starting with “these regulations are bad for our groups and our members.”
• Unnecessary Internet regulations will create widespread depression and anxiety for investors.  That means money to expand broadband availability in underserved or unserved communities will dry up faster than the Mojave Desert.
• If the cable industry doesn’t get its way on this, it will punish consumers like the credit card industry did after “credit card reform.”  Word to the wise.

For months now, several groups purporting to represent the interests of minorities have busily been attacking Net Neutrality as beside the point for the poor and unserved consumer who has been left out of the broadband revolution.  To varying degrees, several of these groups have been spouting broadband industry talking points to the Federal Communications Commission, members of Congress, and the public at large.

For them, and the profitable broadband industry they indirectly represent, providing access at affordable prices is much more important than making sure providers don’t lord over the network they provide to customers.

Access vs. Openness

Consumers are perplexed by this either/or proposition.  For us, both issues are vitally important.  In urban, income-challenged areas, affordability is a crucial issue.  In rural areas, access to anything resembling broadband comes before worrying about the price.  For all concerned, making sure the Internet is not subject to corporate content control, either through direct censorship or through the far-more-common practice of pricing and policy controls, is just as important.

Providers have their self-interest on display when they promote broadband expansion — they want to receive the public dollars available from the broadband stimulus package to pay for that expansion.  Of course, every step of the way they have their fingers all over the process, from broadband mapping that protects incumbents from potential competition, defining what constitutes broadband to be as slow and as cheap to provide as possible, to implement usage rationing through Overcharging schemes like usage limits and usage-based billing, and to advocate for public policy that keeps the Money Party of fat profits running as long as possible without oversight.

The entry of minority interest groups into the debate is nothing new.  Groups of all kinds, including many who one would think wouldn’t have an opinion on Net Neutrality, are all part of the discussion.  Debates ensue, statements are fact-checked, back and forth discussion ensues.  What disturbs me is the small handful of groups who are willing to deal the race card when their own views and statements are challenged and they are threatened with losing the argument. Ill-equipped to argue the merits of their case in detail and withstand the scrutiny of fact-checking, some have introduced race into the debate to obfuscate the issues.

While I don’t doubt their sincerity and passion advocating for increased access and affordability, too many of these groups hurt their own case by accepting generous contributions (or advisory board members) from the telecommunications industry.  Consumers who witness the near total alignment of views between these groups their corporate benefactors are right to be concerned.  Many are asking if those views represent true conviction or “a dollar a holler” advocacy.

The Black Agenda Report, which created this graphic, ponders the same questions many consumers are asking

As Stop the Cap! documented just a few months ago, Broadband for America is a great example of industry-funded astroturf in action.  Large numbers of groups with no apparent connection to the broadband policy debate have found their way onto the roster of members.  From a cattle association to a Native American group that also has a burning interest in sharing their views about corporate jet landing rights, the one thing in common with virtually every last one of them was a financial contribution and/or board member working for big cable or telephone companies.  Thus far, debating a cattle association has not brought charges of being anti-cow, although I suspect consumers are anti-bull.  Debating the merits of Net Neutrality with Native American groups has not brought charges of anti-Native American bias.

Stop the Cap! itself has been on the receiving end of racial rhetoric offered by one of the anti-Net Neutrality advocates out there, Navarrow Wright.  Wright is a former corporate executive at Black Entertainment Television, and spends his days now as a self-proclaimed social media and branding expert. Last year, after exiting as CEO of Global Grind, a hip hop social network, Wright launched Maximum Leverage Solutions, which claims to be a full service consulting firm specializing in social media strategy and Internet Consulting.

Just a few months later, Wright suddenly discovered a big interest in the concept of Net Neutrality.  While he doesn’t disclose his client list, would it surprise anyone if a telecommunications company hired his services for their own “social media strategy?”

Since last fall, Wright has been generating a mix of provider talking points, Google bashing, and attacking groups that support Net Neutrality.  He’s called supporters of an open Internet “digital elites,” the FCC a player of “dangerous games” by ignoring the anti-Net Neutrality public, Free Press a group that wallows “in crazy claims and race-dividing rhetoric,” and tries to connect support for Net Neutrality as somehow representing opposition to increased broadband adoption.

Challenging and debunking his talking points isn’t difficult — they are precisely the same ones the broadband industry has used for several years now.  We invited Wright to a full, in-depth discussion about the merits of Net Neutrality and broadband adoption.  We even got the discussion started, but that’s exactly where it ended.

Wright is also incredibly defensive about the issue of industry-backed mouthpieces and astroturf efforts in general.  Suggesting Wright’s views are inaccurate brings his resume in response, which I suppose was designed to impress readers with suggestions of his built-in expertise, belied by his silence on these issues prior to last year.  In Wright’s original comment, he took our comments about economically disadvantaged Americans and made it an issue of color:

Our piece:

The letter represents the groups’ concerns that broadband for many in America is simply not available, especially for the economically disadvantaged.  They’ve been swayed by industry propaganda to characterize Net Neutrality as a threat to addressing the digital divide by making service ultimately even more expensive.

His response:

Phil, I know (at least I hope) your intent wasn’t to suggest that people of color have been “swayed by industry propaganda” and aren’t capable of thinking for ourselves on technology issues.

James Rucker, executive director of Color of Change added to the debate in late January, wondering why some civil rights groups are only too willing to support discredited industry talking points and advocate against Net Neutrality.

Rucker discovered the same thing we did.  Challenging these groups to explain their positions brings forth repetitious inch-deep talking points and total silence when a rebuttal is offered.  If pushed, they obfuscate with claims their views are being disrespected, when in reality they are only being fact checked.  Perhaps inconvenient, and even slightly embarrassing, but it’s completely appropriate for consumers to ask whether a conflict of interest exists when a group advocates for the positions of the same industry that is sending them big contributions.

The risk, of course, is to tie an organization’s good name to demonstrably false provider propaganda that some groups are willing to repeat, nearly word for word.

Take for instance Wright’s claim that Net Neutrality will force providers to spend money they would otherwise invest for the benefit of the rural, the downtrodden, and the unserved:

That brings me to the other corporate interests: the Internet service providers. It is the ISPs who must invest in, upgrade, maintain and build out the networks that allow us to receive these cool applications. While I don’t find the network side as sexy as the content side, I do know that we have to have it and ISPs need capital to build and maintain it. So the question remains who is going to pay for maintenance and upgrades to the network if Google gets a free ride? Basic economics tells us that if government requires ISPs to give Google a free ride, there’s only one other place to look for the money: consumers like you and me. What’s more, there are those who want to make it even more unfair by insisting that your big-bandwidth-using neighbor should not have to pay more than you, even if all you want to do is check email and watch some YouTube. Who will all of this hurt the most? Low-income consumers.

The only color that really matters here is green

Wright doesn’t know his American telecom history.  Let’s discuss this fiction:

1. Bruce Dixon, a writer for the Black Agenda Report says it better than anyone: “Phone companies invented the digital divide more than a century ago as their core business model, preferring to extend service to affluent areas where they could levy premium charges, rather than building networks out to reach everybody.”  The cable television industry “franchise” requirement came as a direct result of cable industry redlining, the practice of wiring wealthy neighborhoods for cable while bypassing urban and rural areas deemed “unprofitable.”  It’s the same story for broadband, and Net Neutrality is beside the point.  The number crunchers look for Return On Investment (ROI) when considering who gets on the right side of the digital divide.  If they can’t make a killing on you, they’re not going to provide you service.  If you can’t afford their asking price, which is increasing regardless of Net Neutrality, why serve you?  Ultimately it is consumers who overpay for these networks, priced well above cost, generating literally billions in profits.  Why ruin a good thing with altruistic broadband expansion at a fire sale price?
2. Regardless of what Google is doing, providers are seeking new ways to further monetize broadband service, enriching themselves even further.  Prices go up even as the costs to provide the service go down.  The old chestnut about the next door neighbor being a usage piggy is just more of the same “us vs. them” propaganda from providers who want consumers to fight amongst themselves while they run to the bank with the money.  Grandma doesn’t want her broadband service limited either, and she’s way too smart to believe a provider promising dramatic savings for less service from companies that jack up her rates year after year.
3. The best way to guarantee affordable access to broadband service is to develop a national broadband plan that provides the same kinds of “lifeline” services already available for economically disadvantaged phone customers, legislative policies that force markets open to additional competition, government oversight to ensure providers are required to provide service throughout their respective service areas, and stimulus or Universal Service Fund assistance for projects that assure access to those who simply will never pass ROI tests.  Or we can solve everything by not passing Net Neutrality?  Please.
4. Google doesn’t have a free ride.  First, consumers -pay- providers for connectivity.  Ultimately, they are the customers — content producers are not.  Nothing prohibits an ISP from offering hosting services to content producers at competitive prices.  If Google, Amazon, Netflix, or Hulu want to host their content on servers owned by Verizon, Comcast, Time Warner, or AT&T, nothing stops them.  Google pays for its own connectivity to the Internet.  Customers pay for accessing it.  Now providers want to get paid again.  It’s like triple-charging for snail mail – you pay for a stamp to mail it, the person you wrote pays to receive it, and the airline that flew the letter cross country has to pay to transport it.

Remember, it’s the content that drives broadband adoption. ISP’s honestly don’t fret as much about traffic as they claim.  They just care whether they can own it, control it, and profit from it.  The evidence to back this up comes from cable and phone companies in a big hurry to stream video content over their TV Everywhere projects.  Nothing consumes bandwidth like online video, yet there they are enthusiastically embracing it.  They have to, because if they don’t control it, it could eventually lead to people dropping their cable TV subscriptions in favor of online viewing.

Wright’s blog promotes another industry favorite — the dreaded phony “exaflood” which threatens to bring chaos and disorder to our online world… unless we totally deregulate broadband and let them do whatever they want to “solve it.”  That’s more of the same.  We’ve seen the results of that for more than a decade now, and the very digital divide that Wright complains about comes as a direct consequence to letting broadband providers serve, or not serve customers as they please at the prices they want.

Wright and other civil rights groups can throw as many race cards as they like against consumers who see right through their corporate-backed agenda.  That’s because consumers know Net Neutrality isn’t an issue of black or white.  The only color that really matters here is green.

Google plans to offer up to 1Gbps service on its direct to the home fiber network

Google has announced it is doing something about anemic, overpriced, and poorly supported broadband service in the United States.  It’s going to start providing service itself.

In a move that is sure to drive providers crazy, Google is looking for your nominations for communities that are stuck in broadband backwaters, desperate for an upgrade.  With so many suffering from “good enough for you” broadband speeds, threats of “inevitable” Internet Overcharging schemes like usage limits and consumption billing, or customer support that involves reaching more busy signals than helpful assistance, they won’t have to beg for nominations.

Google is planning to launch an experiment that we hope will make Internet access better and faster for everyone. We plan to test ultra-high speed broadband networks in one or more trial locations across the country. Our networks will deliver Internet speeds more than 100 times faster than what most Americans have access to today over 1 gigabit per second, fiber-to-the-home connections. We’ll offer service at a competitive price to at least 50,000 and potentially up to 500,000 people.

From now until March 26th, we’re asking interested municipalities to provide us with information about their communities through a Request for information (RFI), which we’ll use to determine where to build our network.

I can think of a few cities that were victimized by providers in 2009 who have little chance of seeing true fiber optic service any other way.  Rochester, New York, the Triad region of North Carolina, parts of San Antonio and Austin bypassed by Grande Communications’ fiber network, are all among them.  Rochester has the dubious distinction of being stuck with two providers itching to slap usage limits and consumption billing on their customers – Frontier and Time Warner Cable.  Since Verizon FiOS is popping up all over the rest of New York State, residents in the Flower City concerned about being left behind might want to make their voices heard.

Google plans to deliver 1Gbps… that’s a Gigabit — 1,000Mbps service to its fiber customers at a “competitive price.”

While some in the industry consider such speeds irrelevant to the majority of consumers, Google thinks otherwise:

In the same way that the transition from dial-up to broadband made possible the emergence of online video and countless other applications, ultra high-speed bandwidth will drive more innovation – in high-definition video, remote data storage, real-time multimedia collaboration, and others that we cannot yet imagine. It will enable new consumer applications, as well as medical, educational, and other services that can benefit communities. If the Internet has taught us anything, it’s that the most important innovations are often those we least expect.

What’s in it for Google?  Targeted advertising, guaranteed open networks, an improved broadband platform on which Google can develop new broadband applications, and calling out providers’ high profit, slow speed broadband schemes are all part of the fringe benefits.

For providers and their friends who have regularly attacked Google for “using their networks for free,” Google’s fiber experiment deflates providers’ hollow rhetoric, and could finally provide a warning shot on behalf of overcharged, frustrated consumers that the days of rationed broadband service at top dollar pricing may soon be over.

Google released this video announcing their Think Big With a Gig campaign (1 minute)

This isn’t Google’s first experience with being an Internet Service Provider.  The company has experimented with free Google Wi-Fi service in its hometown of Mountain View, California since 2006.

[Update 2:30pm EST: FCC Chairman Julius Genachowski applauded Google's experiment: "Big broadband creates big opportunities," he said in a statement. "This significant trial will provide an American testbed for the next generation of innovative, high-speed Internet apps, devices and services."

The Washington Post has a source that claims Google "doesn't currently have plans to expand beyond the initial tests but will evaluate as the tests progress."  That could mean the experiment also serves a public policy purpose to re-emphasize Google's support for Net Neutrality, and to deflate lobbyist rhetoric about Google's support for those policies being more a case of their own self-interest and less about the public good.  If Google can run its networks with open access, they essentially put their money where their public policy mouth is.]