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Special Report — Who’s Who of Broadband for America: Telecom Industry Connections Exposed

Be Sure to Read Part One: Astroturf Overload — Broadband for America = One Giant Industry Front Group for an important introduction to what this super-sized industry front group is all about.

Members of Broadband for America

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p style=”font-family:arial”>Red: A company or group actively engaging in anti-consumer lobbying, opposes Net Neutrality, supports Internet Overcharging, belongs to an astroturf group, or is an astroturf group itself.
Blue: An equipment supplier whose bread is buttered by the telecommunications industry, but doesn’t go out of their way to actively engage in anti-consumer activities.
Purple: A telecommunications company providing broadband service.
Black: A group or organization about which there is insufficient evidence to connect them to a specific astroturfer, lobbying firm, telecommunications provider, or other aligned special interest.  That doesn’t mean there aren’t ties yet to be uncovered.  Considering the overwhelming majority of BfA members have a vested interest towards the broadband industry, you can draw your own conclusions.

Actiontec Electronics, Inc. — Actiontec is an equipment provider selling high speed Internet modems and routers. Their customers include Verizon, Qwest, TDS, MTS and hundreds of smaller carriers throughout North America. More importantly, it is a member of the notorious anti-regulatory, anti-Net Neutrality “Hands Off the Internet” group run for and by the telecommunications industry. Actiontec is also a member of TV4Us, a group Common Cause called the very definition of Astroturf. It advocates for franchising reform (taking away local government oversight) and hates Net Neutrality. Actiontec took even more action by signing a letter by Netcompetition opposing Net Neutrality.

ADC Telecommunications, Inc. — ADC sells broadband network infrastructure products and services that enable the profitable delivery of high-speed Internet, video, data, and voice services to residential, business and mobile subscribers. Among their clients: AT&T, British Telecom, Comcast, Sprint Nextel, Qwest, T-Mobile, and Verizon. They are also listed as a member of “Hands Off the Internet” and signed a letter by Netcompetition opposing Net Neutrality.

Advanced Digital Broadcast — ADB provides digital set-top boxes for including cable, IPTV, satellite and terrestrial providers.

Alloptic — Sells central office and customer premise equipment to deploy Fiber-to-the-Business and Fiber-to-the-Home.

American Agri-Women — A national coalition of farm, ranch, and agri-business organizations, AAW’s involvement in telecommunications issues is not prominent on their website. The group’s 2009 position statement has one sentence about telecommunications issues: “AAW supports a full range of ownership of telecommunications infrastructure including entrepreneurs, large corporations, municipalities, and other units of local government.”

American Association of People with Disabilities — AAPD gets major donations from both Verizon and the Verizon Foundation, and put a Verizon VP, Richard T. Ellis – on its board (2005). It participated in multiple Verizon-based campaigns, including part of a group put together by Issue Dynamics, a Washington DC public relations firm, that jointly signed an ex parte letter to the FCC, explaining why the Bell companies should not have to open their fiber-optic networks to competition. (Source: Harvard Nieman)

American Council on Renewable Energy — What do C. Boyden Gray, big industry lobbyist and ex-aide to former President George Herbert Walker Bush, and Amory Lovins, alternative energy guru, agree on? The need for a big-bucks trade association that can “bring renewable energy into the mainstream of America’s economy and lifestyle” and otherwise spread the gospel about solar, wind, hydro, geothermal, biomass, biofuels, waste energy and hydrogen energy systems. (Source: Sourcewatch) Their position on telecommunications and broadband issues is not clear from their website.

Americans for Technology Leadership — Americans for Technology Leadership was founded by Jonathan Zuck in 1999 as a “grassroots” organization for concerned consumers who want less regulation in the technology sector.  It also campaigns on general tech issues such as spam.  It has been frequently described as a Microsoft front group.  ATL’s domain name, techleadership.org, is registered to the Association for Competitive Technology.  The site is hosted by Thomas E. Stock and Thomas J. Synhorst’s LLC, TSE Enterprises.  Synhorst is a founding member of the DCI Group, a Washington DC-based strategic consulting and lobbying firm which has counted Microsoft as a prime client for a number of years. (Source: Sourcewatch)

ARRIS — ARRIS provides broadband technology for the cable industry. ARRIS products help cable operators provide cable TV and telephony, high-speed Internet and data access. The ARRIS product line includes cable modem and wireless broadband products, infrastructure for digital video and IPTV, and a Fixed Mobile solution.

AT&T — Broadband provider

BendBroadband — Broadband provider

… Continue Reading

Special Report — Astroturf Overload – Broadband for America = One Giant Industry Front Group

"We're going to need another roll."

"We're going to need another roll."

Astroturf: One of the underhanded tactics increasingly being used by telecom companies is “Astroturf lobbying” – creating front groups that try to mimic true grassroots, but that are all about corporate money, not citizen power. Astroturf lobbying is hardly a new approach. Senator Lloyd Bentsen is credited with coining the term in the 1980s to describe corporations’ big-money efforts to put fake grassroots pressure on Congress. Astroturf campaigns generally claim to represent huge numbers of citizens, but in reality their public support is minimal or nonexistent. — Common Cause’s Wolves in Sheep’s Clothing Part II: More Telecom Industry Front Groups and Astroturf.”

The telecommunications industry has gone all out with a new super-sized front group claiming to “work to bring the Internet to everyone.”  The so-called Broadband for America (BfA) Coalition launched a new website, Broadband for America, which is completely infested with industry players and groups they call “independent consumer advocacy groups,” but are in reality mostly astroturfers themselves.  More than 100 corporate providers and special interest front groups make up the BfA, which they brazenly claim “represent the hundreds of millions of Americans who are literally connected through broadband.”

Of course, what is missing from this mess are the hundreds of millions of actual American consumers.  They aren’t on the list.  Also missing after checking more than 100 BfA member websites is any press push to notify their members they are now a part of this group.  In fact, none of the so-called public interest websites seemed at all interested in promoting their new found friends.

The BfA wants you to think the industry party list is a strength, not a weakness:

The range of members of BfA is evidence of the importance which is being placed on the issues of broadband availability and broadband adoption. It is also evidence of BfA’s commitment to being a full participant on behalf of all stakeholders to provide a central clearinghouse for the latest thinking, the most advanced assessments, and the widest variety of views and opinions on the future of broadband in America.

That’s a word salad that can be condensed down considerably to: The Mother of All Astroturf Front Groups.

A comprehensive guide to the members of the BfA can be found below.  It was developed from extensive research into the background and financing of many of these groups, as well as their membership in classic astroturf groups that are run against consumer interests.

Actiontec Electronics, Inc.
ADC Telecommunications, Inc.
Advanced Digital Broadcast
Alloptic
American Agri-Women
American Association of People with Disabilities
American Council on Renewable Energy
Americans for Technology Leadership
ARRIS
AT&T
BendBroadband
BeSafe
BigBand Networks, Inc.
BTECH Inc.
Cablevision Systems Corporation
CBM of America, Inc.
CenturyLink
Charles Industries, Ltd.
Child Safety Task Force
Cisco
CoAdna Photonics, Inc.
Comcast
CommScope, Inc.
Condux International, Inc.
Consumers First
Corning Incorporated
Cox Communications
CTIA The Wireless Association
DC-Primary Care Association
Dominican American National Roundtable
Enhanced Telecommunications Inc
Fiber to the Home Council
FiberControl
Global Crossing
Hispanic Leadership Fund
Independent Technologies Inc.
Independent Telephone and Telecommunications Alliance (ITTA)
International Association for K-12 Online
Intertribal Agriculture Council
Itaas Inc.
Jewish Energy Project
Latinos in Information Science & Technology Association
Livestock Marketing Association
LookBothWays
MANA (A National Latina Organization)
Motorola
MRV Communications, Inc.
National Association of Manufacturers
National Association of Black Telecommunications Professionals
National Black Chamber of Commerce
National Cable & Telecommunications Association
National Caucus and Center on Black Aged
National Disease Cluster Alliance
National Grange
National Puerto Rican Coalition, Inc.
NDS Limited
Net Literacy
NSG America, Inc.
Occam Networks, Inc
OFS Fitel, LLC
On Trac, Incorporated
PECO II, Inc.
People & Technology
Preformed Line Products, Inc.
Prysmian Communications Cables and Systems USA, LLC
Quanta Services, Inc
Qwest
RetireSafe
Seachange International
Sheyenne Dakota, Inc.
Silver Star Communications
Sjoberg’s, Inc
Small Business & Entrepreneurship Council
SNC Manufacturing Company, Inc.
Stop Child Predators
Sumitomo Electric Lightwave
Sunrise Telecom Inc
SureWest Communications
Suttle Apparatus Corporation
Telecommunications Industry Association
Telework Coalition
The Latino Coalition
Time Warner Cable
United States Distance Learning Association
United States Telecom Association
US Cable Corporation
US Cattlemen’s Association
US Chamber of Commerce
US Internet Industry Association
US Mexico Chamber of Commerce
Verizon
Vermeer Manufacturing Company
Windstream Corporation

When The National Cable & Telecommunications Association is on your member list, along with giant providers like AT&T and Verizon, you know we’re far, far away from defining this group as “pro-consumer.”

Over the last week pouring across websites and independent documentation, I encountered a few particularly brazen astroturf groups and the individuals that run them whose names kept coming up time and time again.

One of the more interesting groups that caught my eye was the Child Safety Task Force.  What could be wrong with a group like that?  Who could possibly ever find fault with a group that sounds like they are dedicated to unyielding protection of our children.

But when one visits their website, some cautionary lights begin to flash when you read their Mission Statement (italics mine):

“The Child Safety Task Force believes that legislation and regulatory decisions concerning children’s safety measures should be grounded in principles of good-governance and sound science.”

Perhaps I have been doing this too long, but the portions in italics sound suspicious.  A child safety group whose primary task is involvement in public policy.  Uh oh.  That smells like lobbyist.  The enigmatic “good-governance and sound science” sounds like code words for pro-industry protections from consumer groups.

Indeed, group president Robert K. Johnson is the Zelig of astroturfers.  He’s everywhere.  He was president of the now-defunct Consumers for Cable Choice, a front group for AT&T and other providers advocating for telco TV and strident opposition to Net Neutrality.  Amusingly, Johnson’s group broadened its focus by dropping the word “cable” from its title and renaming themselves Consumers for Competitive Choice (C4CC).  New name, same old notorious astroturfing.

Johnson’s idea of “child safety” is to poo-pooh the risk of phthalates in children’s toys.  I haven’t found too many consumer groups adopting that kind of pro-plastics industry position.  Johnson testified under the C4CC moniker before the House of Delegates, Maryland General Assembly with this in his opening statement:

“A case in point is the effort by some states to include phthalates in legislation limiting the amount of lead and other proven carcinogens in children’s’ toys. The effort is misplaced and ultimately detrimental to consumers.”

Apparently not satisfied that C4CC was pro-child safety-sounding enough, Johnson’s Child Safety Task Force & C4CC have linked to one another as resources without clearly disclosing their common ties.

Johnson also founded Consumers’ Voice, which Verizon trashed in 2002: “Consumers’ Voice . . . should really be named `AT&T’s Voice.’ At a recent National Conference of State Legislatures meeting, a representative from this group admitted that it is entirely supported by AT&T. Moreover, Consumers’ Voice has no state chapters or affiliates. Johnson actually is an AT&T hired gun.” – William R. Roberts, president, Verizon Maryland, Inc., (Cumberland Times-News, August 22, 2002.) Another BfA member, Consumers First (California), could easily be confused with the former, but no matter, it receives funding from AT&T (and Verizon) too, and belonged to Johnson’s now defunct Consumers for Cable Competition.

Another astroturfer paradise comes courtesy of the LawMedia Group (LMG), a secretive Washington DC public affairs firm. The firm’s website says it “unites the worlds of law, communications, strategic counseling and crisis management into seamless campaigns for Fortune 100 companies, trade associations, start-ups and non-profits.”  Ads for LMG describe its services as including “government relations” (lobbying), “grassroots lobbying,” “issue/initiative/petition management,” “media production” and “opposition research.”

LMG has a nasty habit of ghostwriting op-ed pieces on behalf of third parties, occasionally without their knowledge, and send them in for publication as supposedly written by those individuals.  Last summer, LMG submitted a column it wrote on behalf of Mel King, a Boston-area community organizer and staunch Net Neutrality advocate that turned out to oppose Net Neutrality.  King admitted that LMG was involved and refused to say whether “he was paid for the use of his name,” reported CNET News.

LMG reportedly has two major clients of interest to our readers – Comcast, the nation’s largest cable operator and Microsoft.  The former is looking for cable and broadband industry-friendly advocacy (opposition to Net Neutrality, favoring government “hands off” policies governing cable operators and broadband) and the latter has particularly been interested in Google bashing, especially surrounding a Yahoo-Google advertising deal.

One of LMG’s specialties is reportedly to co-opt groups that most would assume would have no direct interest in the issues its clients hire the PR firm to promote.  Yet suddenly these non-aligned groups  spring forth with amazingly detailed, uniform advocacy for LMG’s clients’ positions in the media, to members of Congress, and even in submitted comments to regulatory agencies.

Would you find it curious that in 2008 The American Corn Growers Association would suddenly find the need to rush a letter to the Justice Department urging them to launch an investigation into Google’s ‘search monopoly?’  Apparently the harvest was finished and they had free time on their hands.  But they only started the trend, because similar letters on the letterheads of the League of Rural Voters and the Latinos in Information Science & Technology Association also followed.  The latter just happens to also turn up as a member of the BfA.

That’s no coincidence.  BfA member Intertribal Agriculture Council, which is supposed to advocate for the wise stewardship of Native-American lands for the benefit of its people, suddenly decided to throw its two cents into last year’s Sirius-XM Radio merger debate, publicly endorsing the deal and urging the FCC to approve it. That was also an action item on the LMG priority list, according to Sourcewatch. They were joined by several other groups that common sense would suggest wouldn’t spend five minutes pondering this transaction.  Among them include (again) the League of Rural Voters and the Latinos in Information Science & Technology Association.  Some other BfA members also chimed in: the National Black Chamber of Commerce, The Latino Coalition, and the American Association of People With Disabilities.

The Latino Coalition left a lot of heads scratching in 2007 when it advocated against bans on exclusive cable providers in rental properties.  Consumers moved into apartment buildings and found they had to take whatever the landlord made available — no satellite TV or competing providers allowed.  Consumer groups howled demanding these exclusive agreements be banished to give consumers choices for subscription television.  The Latino Coalition told the Los Angeles Times that was a bad idea, and anti-consumer.

The Latino Coalition, a nonprofit advocacy group, warned the FCC that prohibiting exclusive contracts could leave minority and low-income residents with higher bills or no service at all.

“The advantages of these exclusive contracts are important selling points for apartment buildings in urban neighborhoods where residents wouldn’t otherwise have the ability to negotiate the best price for cable TV or broadband services,” Latino Coalition President Robert G. de Posada wrote to the FCC.

It comes as no surprise de Posada also opposed Net Neutrality.  He criticized the concept passionately, telling EbonyJet magazine in 2007 it represented “over regulation of the Internet.”  Net Neutrality would, according to de Posada, “stifle rather than facilitate entrepreneurism.”

Among the Coalition’s corporate partners: AT&T and Verizon.  The former’s logo appears at the bottom corner of the The Latino Coalition home page.

Apparently astroturf coordinators like to use some of the same groups for different issues.  This past May, the Intertribal Agricultural Council had a new-found common cause with, of all things, small-jet operators opposed to a proposal to shift some of the airline carriers’ federal tax burden onto small jet aviators.  Jets fly over farmland, and some might even cross over reservations, so I guess that’s a legitimate priority item for a Native American group like IAC, right?

The IAC joined forces with The Alliance for Aviation Across America (AAAA), a group run by LMG according to Sourcewatch.  But they were not alone.  Two more BfA members coincidentally also turn up as improbable members of the AAAA: the National Grange of the Order of Patrons of Husbandry and U.S. Cattlemen’s Association.

Astroturf Warehouse Club: We lie in bulk and pass the BS on to you!

Astroturf Warehouse Club: We lie in bulk and pass the BS on to you!

The practice of bringing non-aligned groups into public policy debates, particularly those involving minorities, can be a public relations miracle worker, especially for lobbying projects that don’t exactly look consumer friendly.  Often, minority public interest group involvement is highlighted by lobbyists appealing to public officials who can make or break a merger deal or vote up or down on regulatory matters.  If Native Americans, Latinos, African Americans, and the disabled are against Net Neutrality or for Internet Overcharging schemes, maybe there is something elected officials are missing.

In reality, all they frequently miss is the public relations lobbying machine in Washington that runs the show.  Even worse is when legitimate consumer voices are crowded out because all of the chairs set out for real consumers are occupied by astroturf groups pretending to represent consumer interests.

One group, the National Caucus and Center on Black Aged, was another oddity in the Broadband for America member roster, until one started taking a closer look at who serves on the group’s Board of Directors.  The connection to Verizon was immediately obvious.  B. Keith Fulton, a Board member, is also President of Verizon West Virginia.  Fulton joined Verizon in 2004 as vice president of strategic alliances and corporate responsibility, where he led a Washington, D.C.-based team that worked with more than 100 national organizations on communications related public policy issues.

But the connections with big telecom didn’t stop there.  Jarvis C. Stewart, chairman, is also Managing Partner at Stewart Partners LLC, a Washington, DC Public Relations firm.  A 2006 press release admits a further connection: “Stewart Partners currently manages the federal legislative and public affairs agendas of global industry titans such as [...] Verizon.”

Muckety, which graphically illustrates public/private connections shows yet more involvement, this time with William Clyburn, Jr., who also serves on the group’s Board. It maps links between Clyburn and the U.S. Telecom Association and AT&T through Clyburn Consulting.

Clyburn Consulting’s website states:

“At Clyburn Consulting, we guide telecommunications stakeholders through the federal legislative process.  We provide strategic analyses of the technical aspects as well as the political implications of telecommunications policy debates.  The impending updates to our telecommunications laws will have a major impact for years to come on how we process voice, video, and data.  Clyburn Consulting is at the forefront of shaping the future of telecommunications. Clyburn Consulting has been instrumental in persuading Members of Congress to support major legislation for a Fortune 500 telecommunications firm (guess who? –PD).  William Clyburn is integrally involved in garnering support by not only providing access to Congressional offices for the client, but also by substantively engaging senior staff on the technical issues.”

On June 8, 2009, the National Caucus and Center on Black Aged wrote the FCC about the national broadband strategy.  Without disclosing any connections to the telecommunications industry, the group advocated:

Unfortunately too many seniors are not aware of these critical, and often life-saving, benefits. In order for more seniors to see the importance of having broadband, barriers must remain low for adoption. Only 15% of seniors cite price as the reason why they have not brought broadband into their homes. Currently, private sector network providers are investing billions of dollars to build out and maintain broadband infrastructure. This investment has enabled affordable prices. If the FCC’s broadband plan does not maintain incentives for the private sector to continue to invest, consumers will see fewer options and possibly higher prices.

We hope that the FCC will provide for continued investment on the part of private sector participants while working to bring broadband to every household in the country. Our nation’s African American seniors have so much to gain from broadband and they deserve to experience its benefits.

When some of these groups testify in hearings or submit written comments “representing consumer interests” when they are in fact acting like sock puppets backed with industry money, too many legislators may be persuaded to support an industry position thinking it’s what consumers really want.

Therefore, it’s important to provide additional disclosure about the groups, companies, and organizations that attempt to claim to speak on your behalf, the consumer broadband user.

This comprehensive breakdown of the members of BfA is by no means absolutely complete.  It is based on a week’s worth of research into the groups and their ties.  As much as possible, links are provided to back up assertions made.  Some groups may have discontinued their support of individual astroturf campaigns that have since expired, but considering the fact most of them are coming back for a repeat performance, past is prologue.

Feel free to build on this work in our Comment section.  We’ll use additional information as part of an effort to construct a resource database for consumers and others at risk of being hoodwinked by the astroturf bonanza that is Broadband for America.  Don’t bother exposing them on their own site’s community forum; it has some seriously draconian rules for user participation:

General Guidelines

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  • You may not use discussions to recommend, praise, or belittle other products, services, or any company without firsthand experience of those products or services. This includes companies recommending other companies.
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  • You are expected and required to read and follow the rules outlined within a category that are posted as Announcements.
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We reserve the right to modify and amend these terms at any time without notice. It is your responsibility to remain informed of current Discuss.BroadbandForAmerica.com policies.  We further reserve our right to disable any account at any time for any reason and without notice.  If there are any rules or policies you do not understand, please contact us.  Finally, any abuse towardsBroadband for America staff and/or management in any form will result in immediate suspension of your account.

Be sure to check out our complete rundown on the members of Broadband for America.  It’s in part two of this Astroturf Special!

“The Verizon FiOS of Hong Kong”: Fiber to the Home 100Mbps Service $35/Month

Phillip Dampier September 27, 2009 Broadband Speed, Competition, Recent Headlines, Video 3 Comments
HK Broadband offers 100% Fiber Optic service to residents of Hong Kong

HK Broadband offers 100% Fiber Optic service to residents of Hong Kong

Hong Kong remains bullish on broadband.  Despite the economic downturn, City Telecom continues to invest millions in constructing one of Hong Kong’s largest fiber optic broadband networks, providing fiber to the home connections to residents. City Telecom’s HK Broadband service relies on an all-fiber optic network, and has been dubbed “the Verizon FiOS of Hong Kong” for its dramatically faster broadband speeds.

Hongkongers have had several choices for broadband service over the years, most offering traditional DSL service throughout the Hong Kong Special Administrative Region (Hong Kong is a territory of the People’s Republic of China). Priced around $32 a month, the most popular service choice offers residents 6Mbps downstream speeds and 0.6Mbps upstream. Some modern residential multi-dwelling units have a more advanced from of DSL service offering up to 18Mbps downstream and 1Mbps upstream.

HK Broadband represents a major competitive threat for traditional DSL service in Hong Kong, because the fiber optic network provides customers with faster speeds ranging from 25Mbps-1000Mbps.  The company also offers a bundle including broadband, a Voice Over IP telephone service, and IPTV (cable television) service with 80+ channels. HK Broadband offers symmetrical speeds on their network, which means your upload speed is as fast as your download speed. The company has pummeled its telephone network-reliant competitors with humorous ads that call out DSL’s slower speeds, particularly for uploads.

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p style=”text-align: center;”>http://www.phillipdampier.com/video/HKBN Ad -- Ants.flv
HK Broadband “Ants” Advertisement: Ten Kung-Fu-Fighting-Ants, representing the downstream speed of a traditional DSL broadband connection, are shown ganging up on a single helpless ant, who represents the weaker upstream speed, demonstrating how traditional DSL services typically offer upload bandwidth that is only a 10th of the download speed.

HK Broadband offers 100Mbps service for $35 per month, just a few dollars more than DSL. But there is an interesting catch. HK Broadband, like other providers in Hong Kong, cope with inadequate international broadband connections. Instead of engaging in Internet Overcharging schemes like usage caps, such as those found in Australia and New Zealand, the company has instead capped the speed for websites located abroad at 20Mbps for both uploads and downloads. The 100Mbps speed is reserved for domestic websites. Some subscribers note they couldn’t get speeds much faster than that when accessing overseas sites regardless of the cap, so it has not presented a major problem. As connectivity improves, so should the speeds, according to company officials.

The company also has a unique residential service guarantee — they promise that you will receive at least 80% of the speed you subscribe to, or they refund double your money back. Of course, this applies only to connections made to websites within Hong Kong.

When you’ve got it, flaunt it, and HK Broadband’s fiber speeds are the hallmark of their marketing campaigns.

http://www.phillipdampier.com/video/HKBN 100Mbps Ad.flv

HK Broadband “Fat Pipe” Advertisement: Real life characters representing Internet content force themselves into a tiny pipeline, representing DSL, but are later liberated by a wide open fiber optic pipeline they can run through with room to spare.

The investment by City Telecom in their fiber optic broadband network has brought impressive financial results to the company, with customers taking more of their telecommunications business in HK Broadband.  That increases the average revenue per subscriber.  The company has also aggressively increased the level of investment to build out its network, producing an economy of scale that has reduced the costs to wire new subscribers.

Traditional Wall Street investors have often been unimpressed with expensive technology upgrades undertaken by telecommunications companies.  Notably, Verizon Wireless’ FiOS fiber to the home network was pummeled by several investor groups who complained Verizon was spending too much on their fiber network, even though their costs to wire each new customer has dramatically decreased with time.  City Telecom has turned that criticism on its head.  Among many of its competitors, City Telecom is the second most profitable, earning an 11% profit margin.

China Securities has showcased the company, noting it enjoys subscriber growth at levels greater than industry growth, is positioned with technology that assures it of long term stability in revenue and income growth, and despite all of the investments the company has made, retains a strong free cash flow.  Most of all, it has very happy subscribers who enjoy a well regarded broadband service, available at fast speeds and a reasonable price.

The incumbent telephone company’s network of copper wire, supporting lower speed DSL service, is not in the same position.  HK Broadband brought Alexander Graham Bell back to life to chastise the notion that a network more than 100 years old is appropriate for 21st century broadband.

http://www.phillipdampier.com/video/HK Broadband Bell Ad.flv

HK Broadband “Alexander Graham Bell” Advertisement: The inventor of the telephone makes a “special-guest” appearance pointing out the fact that the 100 year old telephone network wasn’t designed for today’s broadband connections. This is set in a traditional Chinese Hell-like environment to imply the hellish experience of surfing the Internet with a slow connection.

<

p style=”text-align: left;”>HK Broadband has not escaped the attention of its competitors, of course.  PCCW Limited, Hong Kong’s dominant telephone company, has been aggressively marketing its own fiber, DSL, and wireless broadband products, not allowing HK Broadband to win without a fight. PCCW has had to play catch-up with HK Broadband’s aggressive fiber deployment, which focused on residential and business customers from the outset.  PCCW’s fiber network was primarily intended for business customers, and now the company has been rapidly expanding their fiber network to residential customers.  Today, where PCCW fiber is available, customers can choose from 18Mbps, 30Mbps, 100Mbps, or 1000Mbps service plans.  Many PCCW customers will also be aggressively marketed a wireless mobile Netvigator add-on, one of PCCW’s more successful product lines.

http://www.phillipdampier.com/video/PCCW Fiber Optics Ad.flv

PCCW “Fiber Optics” Advertisement: Lampooning HK Broadband’s fiber optic network, PCCW says it had their own extensive fiber optic network laid before HK Broadband came around.  Its tagline, “…the real fiber optics broadband.”

A detailed presentation of HK Broadband and its potential attractiveness to investors was produced by China Securities and features an interview with NiQ Lai, the Chief Financial Officer of City Telecom.

http://www.phillipdampier.com/video/Chinasecurities-City Telecom Presentation September.flv

[13 minutes]

BendBroadband Introduces New Faster Speeds, But Offensive Usage Caps the Skunk at the Broadband Party

Phillip Dampier September 23, 2009 BendBroadband, Internet Overcharging, Recent Headlines 26 Comments
BendBroadband introduces a new logo and tagline

BendBroadband introduces a new logo and tagline

BendBroadband, a small provider serving central Oregon, breathlessly announced the imminent launch of new higher speed broadband service for its customers after completing an upgrade to DOCSIS 3.  Along with the launch announcement came a new logo of a sprinting dog the company attaches its new tagline to: “We’re the local dog. We better be good.”

What some BendBroadband customers didn’t realize was that dog comes with a leash.

“The new speeds sound great, right until you read the fine print and discover the awful usage allowances they attach to them,” writes Seth, a Stop the Cap! reader.  “That’s Bend (Over) Broadband.”

BendBroadband plans range from 8Mbps service for $36.95 a month ($46.95 broadband-only), 14Mbps service for $44.95 a month ($54.95 broadband-only), and a forthcoming Gold 25Mbps plan for $54.95 a month ($64.95 broadband-only).  The 14Mbps service represents a speed increase for their current Silver plan.  All of these plans have a 100GB usage allowance, with a $1.50/GB overlimit penalty.

100gb

A new Platinum plan will offer 60Mbps service for $89.95 a month ($99.95 broadband-only), yet only incrementally bumps the usage cap up by 50GB, to 150GB per month.

BendBroadband's dog comes with a leash... 100GB Usage Caps

BendBroadband's dog comes with a leash... 100GB Usage Caps

Company officials seemed pleased with themselves.

“Who would of believed ten years ago that we would have these types of speeds available?” said Frank Miller, the company’s Chief Technology Officer. “60Mbps…that’s one fast puppy!”

“That dog (logo) has broadband rabies and needs to be put down,” replies Seth’s wife Angelica, who telecommutes and does most of her work from home.

“Central Oregon can be wowed by the speed, but what good is it if you can’t use it without running into their usage caps and limits,” she asks.

“I’d pay for the premium tiers and get on a waiting list today if they did away with the usage caps.  There is no way I am paying to support a company that sticks usage caps on their customers and makes me waste time doublechecking how much I’ve used this month,” she said.

Seth and Angelica have taken a pass on BendBroadband’s dog show and are sticking with the local phone company’s DSL service until something better comes along.

“The speed isn’t the best, but at least you can use the service and not have to worry about it,” Seth writes.

Shaw Steamrolling Through British Columbia in “Sell To Us Or Die” Strategy

Phillip Dampier September 23, 2009 Canada, Competition, Recent Headlines, Shaw 1 Comment
Delta, part of the Vancouver metro area, British Columbia

Delta, part of the Vancouver metro area, British Columbia

Stop the Cap! reader Rick has been educating me about some of the new-found aggression by Shaw Communications, one of western Canada’s largest telecommunications companies, in expanding its business reach across Canada.  Woe to those who get in the way.

Novus Entertainment is already familiar with this story.  As Stop the Cap! reported previously, Shaw launched fire sale pricing on its cable, broadband, and telephone services ($9.95 a month for each) and target marketed those limited special offers in and around buildings wired for Novus service.  Novus protested to the BC courts, claiming Shaw was engaged in predatory pricing behavior.

A few days ago, an Ontario court judge dismissed a suit brought by Rogers Communications against Shaw over Shaw’s plans to buyout Mountain Cablevision, a smaller cable provider serving parts of southwestern Ontario.  Rogers was upset because the purchase violated a “covenant” between the two telecom giants not to compete in each others’ service areas.

Now, Shaw’s trucks are rumbling down the roads of Delta, a community south of Vancouver,  as work begins on constructing a cable system that will directly compete against Bragg Communications’ Delta Cable.  Shaw also has won approval from the Canadian Radio-television Telecommunications Commission (CRTC) to competitively wire Ladner and adjacent neighborhoods southeast of Vancouver.

Shaw president Peter Bissonnette told industry news site Cartt.ca the wiring of Delta and Ladner comes as a result of “people there saying they would like to get Shaw.”  So now residents can look out their windows and see Delta Cable’s wiring on one side of the street and Shaw’s wires on the other.

Another success story for head-on competition leading to lower prices and more choice, right?

Not so fast.

As Cartt.ca reports (one article view is available for free, subscription required thereafter), there is a history to be considered here, and that may include another agenda beyond the “consumers wanted us so we came” explanation.

There’s a bit of history to the Delta system and Shaw, however. Back in 2006, when then-owner John Thomas decided to sell Delta Cable and Coast Cable, many assumed he would sell to Shaw. After all, Thomas was on Shaw’s board of directors. However, aware of the fact most of his employees would likely be out of work if nearby Shaw bought it, he instead surprised most by selling to what was then Persona Communications, for about $90 million.

Some months later, Persona itself was purchased for a reported $750 million by Bragg Communications, which does business, of course, as EastLink, primarily in Eastern Canada.

Cartt reports it is no secret Shaw wants the Delta region as part of its greater Vancouver service area, and the traditional route by which most cable companies do this is by buying out the incumbent provider.  Bragg Communications understands this, and has sold some of its own systems in the past, most recently in Saskatchewan.  But so far, not in Delta.

Bissonnette was cagey when asked if Shaw had pursued the buyout route, which is always cheaper than overbuilding an area with all new wiring.

“They know what we are doing. There’s always more than one way to skin a cat you know,” he said.

If Shaw adopts the same aggressive strategy in Delta they have used against Novus in downtown Vancouver, it will likely make Delta’s current cable system unprofitable.  Bragg would be forced to consider either engaging in a sustained price war, something Shaw is in a better position to handle because of revenue earned from non-competitive areas, or eventually sell the Delta Cable system at a fraction of its original value.

For comparison, Delta Cable charges $26 a month for analog basic cable plus $26.95 a month for a robust digital channel package.  Broadband service, with a 62GB usage cap is $39.50 per month.  They don’t seem to offer telephone service.  Shaw promoted a digital/basic combination package in downtown Vancouver for $9.95 a month and broadband for an additional $9.95.  Shaw to Delta Cable: Compete with that.

For a time, up to 28,000 households in the area may enjoy some benefits from a sustained price battle, unless Bragg capitulates and sells out early, but in the end, if Shaw engages in the kind of allegedly predatory pricing it has in downtown Vancouver against Novus, the benefits will be short-lived, and Shaw always has time to make up the difference down the road.

CRTC Embarrassed By FCC Net Neutrality Actions?

Phillip Dampier September 22, 2009 Canada, Net Neutrality, Public Policy & Gov't, Recent Headlines, Video Comments Off
Professor Geist

Professor Geist

The Canadian Radio-television Telecommunications Commission, the Canadian equivalent of the Federal Communications Commission in Washington, may be forced to consider American broadband policy before defining Net Neutrality and its role in Canadian broadband, according to an article published today in The Globe & Mail.

[FCC Chairman Julius Genachowski's] proposal – to codify and enforce some general principles of “Net neutrality” – comes as the Canadian Radio-television and Telecommunications Commission is expected to release its own position this fall, after public consultations this summer that prompted feedback from tens of thousands of Canadians.

“The kinds of principles that the FCC is now looking to put into rules are precisely what the CRTC heard from many groups this past summer,” said Michael Geist, a University of Ottawa professor who holds the Canada Research Chair in Internet and E-commerce Law. “The kinds of concerns that Canadians have been expressing have clearly been taken to heart by the FCC.”

Many Canadian citizens have been unhappy with the CRTC after a summer of hearings and policy decisions which have almost universally-favored Canadian broadband providers’ positions.  The CRTC seemed skeptical during hearings over the urgency to enforce Net Neutrality protections and stop provider’s throttling of peer to peer networks.  But consumers were even more upset when the Commission agreed with Bell, Canada’s largest phone company and wholesale broadband provider, and allowed the company to impose “usage based billing (UBB)” (Internet Overcharging) on wholesale buyers — primarily independent Internet Service Providers.  Canadian customers attempting to avoid usage caps and consumption billing relied on more generous policies from independent providers, policies likely to be revoked with the imposition of UBB, potentially making flat rate broadband service in Canada largely extinct.

In general terms, Net neutrality refers to the concept that access to all legal content on the Internet should be equal. The concept often comes up in relation to the practice of “bandwidth throttling,” where ISPs limit the transfer speed of certain kinds of data – such as the transfer of large movie files between users – but not other kinds.

Many large Canadian ISPs have argued that network management doesn’t affect Net neutrality, and taking away an ISP’s ability to manage its network results in worse service for a large number of customers.

Currently, there is no uniform practice among large ISPs in Canada when it comes to network management. Some firms throttle bandwidth during certain times of the day, whereas other limit bandwidth all the time, or not at all. A CRTC ruling this fall could go a long way toward implementing a uniform code for all ISPs.

“In light of what we’ve seen today, [the CRTC ruling] will be particularly telling because the benchmark now isn’t just what the CRTC heard during this hearing, the benchmark now is our neighbours to the south,” Prof. Geist said. “The CRTC will in many ways be measured up against what the FCC is doing in the U.S.”

HissyFitWatch: Shaw & Rogers Non-Compete Agreement Tossed, Allowing Shaw Acquisition of Mountain Cablevision

Phillip Dampier September 21, 2009 Canada, Competition, HissyFitWatch, Recent Headlines, Rogers, Shaw 5 Comments
Who Dares to Break the most sacred Ark of the Cable Covenant?

Who dares break the most sacred Ark of the Cable Covenant?

In March 2000, two cable magnates sat down for the cable industry equivalent of My Dinner With Andre.  Fine wine, beautiful table linens, an exquisite meal, and a Monopoly board with pieces swapped back and forth representing hundreds of thousands of Canadian consumers.  Ted Rogers and Jim Shaw drew a line on the western Ontario border and agreed to stay on their respective sides of it.  Ted and Jim divvied up each others cable interests, swapping Rogers’ systems west of Ontario with Shaw’s systems east of the provincial line. Thus was born the Ark of the Cable Covenant, with its founding principle: Thou shalt not compete or intrude in my territory.

The only question left at the end of the meal was who was going to pick up the check.  You did.

And so it was.  Since 2000, Shaw Communications has kept its operations west of Ontario, Rogers stays in Ontario and points eastward.  A very nice state of affairs, as long as you are not a Canadian consumer looking for competitive relief from high prices and lousy service.

Shaw Raids Ontario

Shaw Raids Ontario

But in July there was heard a great rumbling across the prairies and into the verdant forests and rolling hills of southwestern Ontario.  What was that sound?  Who were these cowboy hat wearing hordes riding across the lands to the shores of Lake Ontario carrying saddle bags stuffed with cash?  Why look, Calgary-based Shaw is staging a $300 million dollar buyout raid on Mountain Cablevision, Ltd., a 41,000 subscriber independent cable company based in Hamilton, Ontario.

But what of the sacred agreement?  Ted Rogers passed away in December, leaving Shaw to rhetorically ask, “What agreement? Do you know anything about an agreement?”

Indeed, there is no honor among thieves and cable executives seeking the spoils of a highly uncompetitive industry.  Rogers was shocked to discover an invasion on their turf, and they responded with a torrent of attorneys to block the deal, as Canwest News Service notes:

“Shaw is bound by the restrictive covenant which prohibits Shaw from building or acquiring any broadband wireline cable business in Ontario, Quebec or Atlantic Canada,” Rogers argued in court documents released Thursday.

Thankfully for Shaw, Ontario courts do not typically recognize “covenants” as sacred documents not to be broken.  Justice Frank Newbould on the Ontario Superior Court of Justice rejected the de facto non compete agreement and said Rogers had not proven any irreparable harm from the sale, dismissing Rogers’ “proof” as “speculative in the extreme.”

Of course, you realize this means war.

Tim Pinos of Cassels, Brock & Blackwell LLP is Rogers’ lead lawyer on the file. Shaw’s intentions are clear, he said Friday: “Shaw desires to re-enter Eastern Canada and acquire cable systems.”

Aside from picking a competitive fight with Rogers, an expansion east would pit Shaw against smaller but powerful players, such as Videotron, which is owned by giant Quebecor Inc., and commands a near-monopoly in Quebec.

With the agreement shattered, Rogers is likely casting its eyes westward, observers say.

Earlier this week, Edward Rogers was appointed to the role of deputy chairman of the company his father built. He moves from heading up Rogers Cable and will also oversee new operational responsibilities, including strategic acquisitions.

Unfortunately for consumers, some sacred agreements will remain unbroken.  Namely the one that keeps companies like Shaw and Rogers from competitively wiring communities already served by each other and competing head to head.  That simply wouldn’t do.  It would ruin a perfectly delightful meal.

Doubletake: Company With 5GB Limit in Acceptable Use Policy Promises “Near-Unlimited Bandwidth Capacity” to West Virginia

bullJust like FairPoint Communications, the Towering Inferno of phone companies haunting New England, Frontier Communications is making a whole lot of promises to state regulators and consumers, if they’ll only support the deal to transfer ownership of phone service from Verizon to them.

This time, Frontier is issuing a self-serving press release touting their investment of some $4 million dollars in its broadband networks in Charles Town and Princeton, West Virginia.  But the best part was the claim the upgrades would “offer customers fast broadband speeds and near-unlimited bandwidth capacity.”

In Princeton, 44 miles of fiber-optic cable will connect all Frontier High-Speed Internet (HSI) equipment to the exchange`s main switch, and 37 additional miles of fiber cable are being installed in the Charles Town exchange. These upgrades will allow Residential HSI speeds of up to 6 Meg and Business HSI speeds of up to 12 Meg. The upgrades will allow provisioning of Metro Ethernet service of up to 100 Meg, resulting in very high data speeds for private networks among multiple business locations.

These upgrades are all well and good, and are perhaps more than urban-focused Verizon was willing to do in the state, but before West Virginians get too excited by the words “fiber cable” and “near-unlimited bandwidth capacity,” it might be wise to consider the implications of transferring an entire state’s telephone business to a company that still insists on defining an “appropriate amount of usage” on that near-unlimited network at a piddly 5GB per month.

The company also promoted their “computer giveaway” program:

Recognizing that the lack of a personal computer is a barrier for many families, since 2006 Frontier has provided more than 10,000 free computers to qualifying customers in West Virginia. A large percentage of the computers went to first time computer households, who also benefited from free on-site installation.

To the uninitiated, that may suggest a benevolent phone company handing out free computers to the needy with no strings attached.  In fact, this was a Frontier customer acquisition promotion.  Customers signing up for a bundle of telephone and broadband and/or satellite service could qualify for a free basic Dell Netbook (valued at under $400), if they are in good standing with the company, agree to a “price protection agreement” holding them to the company for two years (or facing a nasty early termination fee running several hundred dollars), and also pay a handling fee:

Customer pays handling charges and taxes totaling $45. Customers must subscribe to a new package of Frontier residential local service with features, Unlimited Nationwide or Statewide Long Distance voice-calling and qualifying High-Speed Internet service. Requires a two-year Price Protection Plan on Frontier services (excludes satellite TV) with a $300 early termination fee. Offer available while supplies last. Frontier reserves the right to substitute a comparable Mini Laptop. Other offers available for existing High-Speed Internet customers. Applicable taxes and surcharges apply. Electronic or other written contract signature for Frontier services is required. Some Frontier services are subject to availability. Installation charges may apply. Unlimited U.S. Long Distance minutes are for residential voice usage and exclude 900, international, directory assistance and dial-up Internet calls.

For a whole lot of West Virginia, broadband service means one thing – DSL from the phone company.  Satellite broadband is costly, capped, and has terrible customer satisfaction ratings.  Cable television is a dream for significant parts of the mountainous state.  Do West Virginians want to risk their broadband future on a company that insists on an Acceptable Use Policy with a 5GB usage limit in it?

Residents of Rochester, New York know Frontier Communications all too well.  They’ve been our local telephone company since being absorbed by Citizens Communications after the colossal downfall of Global Crossing, which took ownership of the formerly independent Rochester Telephone Corporation.

Don’t let dreams of fiber dance too much in your head.  Frontier routinely installs fiber, but only between their central offices and remote equipment that helps reduce the distance between telephone switch equipment and the copper wiring out on the telephone poles.  It does help provide the potential of speed increases for DSL service by reducing the length of copper wire DSL travels on, but by no means should imply West Virginia will see fiber to the home in their near future.

If Frontier Communications lacks the means and the will to wire New York’s second largest economy and third largest metropolitan area with more than 1,000,000 residents with fiber to the home, don’t think for a moment they’re going to be any hurry to light up the state of West Virginia.

Indeed, for many residents of the Flower City, the bloom is well off Frontier’s rose, trapping this community in a broadband backwater with a telephone company unwilling and/or unable to provide the kind of 21st century broadband service that is presently being provided in several other upstate cities as Verizon installs its FiOS fiber network.  For Rochester, and for too many other cities, the broadband superhighway from the phone company has little more than tumbleweeds blowing across.

This site was founded last year when Frontier introduced its 5GB usage cap, and we coordinated a consumer response which forced the company to pull back from its enforcement.  But the threat still looms over the heads of their customers from coast to coast as long as it remains a part of their Acceptable Use Policy.

The time has come for Frontier to banish the 5GB language from its Acceptable Use Policy once and for all and stop toying with Internet Overcharging schemes altogether, especially as it seeks to bring the threat of those schemes to millions of Americans that may find their only realistic broadband option coming from this provider.  Otherwise, it’s time for consumers to get on the phones and tell their elected officials and public utility commissions how they feel about getting broadband service from a phone company that tells them:

Frontier may suspend, terminate or apply additional charges to the Service if such usage exceeds a reasonable amount of usage. A reasonable amount of usage is defined as 5GB combined upload and download consumption during the course of a 30-day billing period. The Company has made no decision about potential charges for monthly usage in excess of 5GB.

Sit Down For This: Astroturfing Friends Sold on Pro-Internet Overcharging Report

Phillip "Doesn't Derive a Paycheck From Writing This" Dampier

Phillip "Doesn't Derive a Paycheck From Writing This" Dampier

I see it took all of five minutes for George Ou and his friends at Digital Society to be swayed by the tunnel vision myopia of last week’s latest effort to justify Internet Overcharging schemes.

Until recently, I’ve always rationalized my distain for smaller usage caps by ignoring the fact that I’m being subsidized by the majority of broadband consumers.  However, a new study from Robert Shapiro and Kevin Hassett at Georgetown University is forcing me to reexamine my personal bias against usage caps.

There’s a shock, especially after telling your readers caps “were needed.”

As I predicted, our astroturfing and industry friends would have a field day over this narrowly focused report that demands readers consider their data, their defined problem, and their single proposed solution.  The real world is, of course, slightly more complicated.

I used to debate some of my economist friends on why I thought metered pricing or more restrictive usage caps were a bad idea, but I couldn’t honestly say that my opinion was entirely objective.  My dislike for usage caps stems from the fact that I am a heavy broadband user and an uncapped broadband service is very beneficial to me since everyone else pays a little more so that I can pay a lot less on my broadband service.  But beyond self interest, I can’t make a good argument why the majority of broadband users who don’t need to transfer a lot of data should subsidize my Internet requirements.

Your opinion is still not entirely objective, George.  Your employer has industry connections.

Our readers, many of whom are hardly the usage piggies the industry would define anyone who opposes these overcharging schemes, all agree whether it’s 5GB or 150GB per month, they do not want to watch an Internet “gas gauge” or lose their option of flat rate broadband pricing that has worked successfully for this industry for more than a decade.  George and his friends assume this is an “us vs. them” argument — big broadband users want little broadband users to subsidize their service.

That’s assuming facts not in evidence.

What is in evidence are studies and surveys which show that consumers overwhelmingly do not want meters, caps, usage tiers, or other such restrictions on their service.  They recognize that a provider who claims to want to “fairly charge” people for service always means “everyone pays more, some much more than others.”  To set the table for this “fairness,” they’ve hired Washington PR firms to pretend to advocate for consumers and hide their industry connections.  Nothing suspicious about that, right?

Although George can’t make a good argument opposing usage caps, that doesn’t mean there aren’t any.  Among the many reasons to oppose caps:

  • Innovation: Jobs and economic growth come from the online economy.  New services created today by U.S. companies, popular here and abroad, would be stifled from punitive usage caps and consumption billing.  Even the broadband industry, now in a clamor to provide their own online video services, sees value from the high bandwidth applications that would have never existed in a capped broadband universe, and they are the ones complaining the loudest about congested networks.
  • Consumer Wishes: Consumers overwhelmingly enjoy their flat rate broadband service, and are willing to pay today’s pricing to keep it.  The loyalty for broadband is much greater than for providers’ other product lines – television and telephone.  That says something important — don’t ruin a good thing.
  • The Fantasy of Savings: As already happened across several Time Warner Cable communities subjected to “experimentation,” the original proposals for lower consumption tier pricing offered zero savings to consumers who could already acquire flat rate “lite” service for the same or even lower prices.  Even when tiers and usage allowances were adjusted after being called out on this point, consumer outrage continued once consumers realized they’d pay three times more for the same broadband service they had before the experiment, with absolutely no improvement in service.  Comcast and other smaller providers already have usage caps and limits.  Pricing did not decline.  Many combine a usage allowance -and- lower speed for “economy” tiers, negating the argument that lower pricing would be achieved with fast speeds -and- a usage allowance.
  • Justifying Caps Based on Flawed Analysis: The report’s authors only assume customer adoption at standard service pricing, completely ignoring the already-available “economy” tier services now available at slower speeds.
  • Speed Based Tiers vs. Consumption Based Tiers: Consumers advocate for speed-based tiering, already familiar to them and widely accepted.  New premium speed tiers of service can and do already generate significant revenue for those who offer them, providing the resources for network expansion providers claim they need.
  • Current Profits & Self Interested Motives: Broadband continues to be a massively profitable business for providers, earning billions in profits every year.  Now, even as some of those providers reduce investments in their own networks, they claim a need to throw away the existing flat rate business model.  Instead, they want paltry usage allowances and overlimit penalties that would reduce demand on their networks.  That conveniently also reduces online video traffic, of particular concern to cable television companies.
  • Competition & Pricing: A monopoly or duopoly exists for most Americans, limiting competition and the opportunity for price savings.  Assuming that providers would reduce pricing for capped service has not been the result in Canada, where this kind of business model already exists.  Indeed, prices increased for broadband, usage allowances have actually dropped among some major providers like Bell, and speed throttles have been introduced both in the retail and wholesale markets.

More recently, building our colocation server for Digital Society has made me realize that usage caps not only has the potential to lower prices, but it can also facilitate higher bandwidth performance.  Case in point, Digital Society pays $50 per month for colocation service with a 100 Mbps Internet circuit, and at least $20 of that is for rack space and electricity.  How is it possible that we can get 100 Mbps of bandwidth for ~$30 when 100 Mbps of dedicated Internet bandwidth in colocation facilities normally costs $1000?  The answer lies in usage caps, which cap us to 1000 GBs of file transfer per month which means we can only average 3 Mbps.

One thousand gigabytes for $30 a month.  If providers were providing that kind of allowance, many consumers would consider this a non-issue.  But of course they are not.  Frontier Communications charges more than that for DSL service with a 5GB per month allowance in their Acceptable Use Policy (not currently enforced.)  Time Warner Cable advocated 40GB per month for $40-50 a month.  Comcast charges around $40-45 a month for up to 250GB.  Not one of these providers lowered their prices in return for this cap.  They simply sought to limit customer usage, with overlimit fees and penalties to be determined later.

Of course, web hosting is also an intensively competitive business.  There are hundreds of choices for web hosting.  There are also different levels of service, from shared web hosting to dedicated servers.  That is where the disparity of pricing is most evident, not in the “usage cap” (which is routinely more of a footnote and designed to keep Bit Torrent and high bandwidth file transfer services off their network). There is an enormous difference in pricing between a shared server environment with a 1000GB usage cap and a dedicated rack mount server located in a local facility with 24 hour security, monitoring, and redundancy/backup services, even with the same usage cap.

So the irony of a regulation intended to “protect” the little guy from “unfair usage caps” would actually force our small organization onto the permanent slow lane.

Actually, the Massa bill has no impact on web hosting usage caps whatsoever.  George’s provider friends would be his biggest risk — the ones that would “sell” insurance to his organization is he wanted assurance that his traffic would not be throttled by consumer ISPs.  I’d be happy to recommend other hosting providers for George if he felt trapped on a “slow lane.”  That’s because there is actual competition in web hosting providers.  If the one or two broadband providers serving most Americans had their way, it would be consumers stuck on a permanent slow lane with throttled service, not organizations like his.

So, who is in agreement with George on this question?  None of his readers, as his latest article carries no reader responses.  But fellow industry-connected astroturfers and providers themselves share their love:

PC Magazine reported even Robert Shapiro, one of the report’s authors, is not advocating for usage caps:

“We’re not talking about a bandwidth cap,” Shapiro said during a call with reporters. “We were looking simply at the different pricing models and their impact on the projections of broadband uptake based on these income sensitivities.”

The report does not specify how ISPs should implement pricing, Shapiro said. “The most important thing to me as an economist is the flexibility – that is, Internet Providers can better determine than I can the particular model that works best.”

That’s not the message astroturfers are taking forward, as they try and sell this as “pro-consumer.”

Hotel Guests Rebel Against Internet Overcharging: Consumers Won’t Pay More No Matter Where They Are

hyatwif In 2007, we took our first major trip away from western New York in 20 years and spent two weeks an hour away from Calgary, Alberta.

After two weeks in Kananaskis Country, Banff, Calgary, and other spots all over southern Alberta, we came away with the Good, the Bad, and the Ugly:

The Good

  • Alberta is like Texas, only without the anger: Friendly people everywhere
  • Amazing Canadian Rockies contrasting with vast flat prairies and never-ending views of canola, buckwheat, and other crops
  • The only place that could convince me to purchase and wear a cowboy hat (they are functional after all)

The Bad

  • A Dodge Charger is considered a “small” rental car on Alberta’s vast paved (and frequently unpaved) roadways
  • Calgary’s love of photo radar and red light cameras, which must sustain the city’s revenue base
  • You’re in “pop” country, and you’d better like Pepsi because Coca-Cola is hard to find.  A “can of pop” on a menu means exactly that.  Ask for ice.
  • There are no bumper stickers in Alberta — there are “deckles.”  I contemplated phoning the CBC to find out what a deckle was until I realized they meant “decal.”

The Ugly

  • Internet access in hotels we stayed at was either non-existent, slow, or erratic.

Now before you say vacations should mean a break from the Internet, know that for those of us who spend a lot of free time taking care of websites like this, that is the equivalent of asking someone to take a vacation from electricity.  I don’t do camping.

It turns out my experience is becoming less common, as hotels realize sharing a DSL line among 50+ guests on a Linksys wireless router stuck on a shelf in the lobby is just not going to cut it.  Instead, hotels and motels not only in Canada but across the United States have beefed up their broadband… and discovered they could make a killing by overcharging guests to access it.

Now consumers in growing numbers are deciding the “daily fee” for broadband common on hotel bills, often ranging from $10-15 a day, is a dealbreaker.  They are taking their business elsewhere, even if it means foregoing a luxury hotel to stay in a middle-of-the-road chain with the screaming kids in the pool downstairs, as long as the Internet is free.

USA Today reports that for some consumers, charging any fee for Internet access at a hotel is unacceptable.

Frequent business traveler Randall Blinn refuses to stay at hotels that charge for Internet access.

“It really irritates me that the more expensive hotels charge for Internet access when the inexpensive hotels provide it for free,” says Blinn, a computer consultant in Louisville.

Blinn is one of many travelers disturbed by hotels that charge a daily fee for Internet access. He says he books less-expensive hotels with free Internet access, even if his company will pay for a more expensive hotel that charges for online access.

Some 40 percent of hotel chains in the United States have a daily fee for Internet access.  For the hotels that charge, it’s just another source of revenue, just like charging for in-room telephone calls that consumers learned to avoid by using their cell phones.

For Blinn, who has spent about 50 nights in hotels this year, any charge is unacceptable. If he must stay at a hotel that charges, he says, he leaves the hotel for a fast-food restaurant or a coffee shop that provides free Internet access.

A few weeks ago, Blinn says, he spent a lot of time in the concierge lounge of the Marriott hotel in Salt Lake City, because the hotel was charging for Internet access in rooms but not in the lounge.

Some consumers have found methods to avoid the daily fee, ranging from arguments with hotel personnel demanding that daily fees be waived (one went as far as to turn in all of the personal care items left in his room, which he argued cost more than Internet access did anyway), to strategically choosing to stay adjacent to lobbies or other public areas where free Wi-Fi was available, hoping to jump on the wireless signal from their rooms.  Others bring wireless data plans from their cell phone provider, and use those networks for wireless access, bypassing the hotel altogether.

Some hotels automatically waive fees for their most frequent guests, typically enrolled in premium guest club memberships.  But for people like Blinn, having to pay for Internet access for 10-14 days of hotel stays isn’t worth it to “earn” free Internet.  He simply avoids any hotel that charges for access, and let’s them know why.

Jeff Weinstein, editor in chief of Hotels magazine, a trade publication, suggests that kind of complaining will probably put an end to the “daily Internet access fee.”

“I think the message from consumers about this is getting louder, and you will continue to see more (hotel) brands move toward free access over the next year or two,” he told the newspaper.

Below the jump, learn which hotel chains charge guests for Internet access, and which do not.

… Continue Reading

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