Sen. Paul Hornback (R-AT&T)

A Kentucky state senate panel on Tuesday approved a bill admittedly-authored by AT&T that could allow the company to abandon providing basic telephone service in areas deemed not sufficiently profitable.

Senate Bill 12 is just the latest effort by AT&T to end “Universal Service,” the basic principal that all Americans should have equal access to basic landline telephone service.

The proposed legislation would allow the three largest phone companies in Kentucky — AT&T, Windstream, and Cincinnati Bell to abandon customers who, in one possible scenario, do not agree to a more deluxe feature package that includes long distance calling, wireless service, and/or broadband.

“This bill represents a grave threat to continued, stand-alone, basic telephone service for many Kentuckians who don’t have the luxury of access to Twitter and all the things that we in urban areas tend to take for granted,” Tom FitzGerald, director of the Kentucky Resources Council told the Lexington Herald-Leader.

AT&T says allowing it the right to terminate rural landline service would “spur innovation and create jobs.” It would also strip Kentucky of its power to investigate and force resolutions of consumer complaints.

The optics of the bill’s primary sponsor, Sen. Paul Hornback (R-Shelbyville/AT&T), sitting next to the two AT&T executives who authored the bill as he testified before the Senate Committee on Economic Development, Tourism and Labor was not lost on the bill’s opponents.

“It’s obvious who he is really working for,” said our regular Kentucky reader Paul in Louisville.

Daniel, the Stop the Cap! reader who first shared the story with us, is not happy either.

“This infuriates me,” he writes. “If AT&T gets their way, they will have less reason to invest in areas that are underserved or not served at all, and allow them to further push people to their horrific cell service.”

Daniel barely gets DSL from AT&T — 3Mbps if he’s lucky, and most of his neighbors cannot get any broadband from the company because they don’t officially service the area with broadband.  Daniel suspects once AT&T is deregulated further, they will have even fewer reasons to focus on less-populated regions of the state.

Hornback: "Nobody knows better than AT&T what the company needs the legislature to do for it."

“AT&T is my only reliable option – and if I can’t keep their Internet service then I will lose my job,” he says.

In 2006, AT&T helped push through a deregulation measure that stripped the Kentucky Public Service Commission of its ability to oversee prices for telecommunications services in the state. Customers of both AT&T and Cincinnati Bell soon saw price increases after the legislation passed with arguably no improvement in service.

Hornback argues S.12 will help “modernize telecommunications in the state of Kentucky,” without explaining exactly how abandoning customers enhances their level of service.

AT&T says they will not completely exit rural Kentucky if given the power to disconnect its landline network.  It can sell rural customers AT&T cell phone service instead. Critics say that comes at a substantially higher price and offers only limited broadband.

Hornback defended that, suggesting the company is wasting money and resources keeping its current antiquated landline facilities when it might be better spending that money on wireless services.

But customers would face charges starting at nearly $40 a month after taxes and fees for a basic AT&T wireless plan with as few as 200 calling minutes a month.

Hornback got around initial opposition to an earlier measure he introduced — SB 135, by reintroducing essentially the same measure inside another unrelated bill.  Hornback said that was an effort to give the legislation “a fresh start” in light of heated criticism from consumer groups, the AARP, and even Kentucky businesses.

The committee voted 9-1 for Hornback/AT&T’s measure and sent the bill forward to the Senate floor.  The single “no” vote came from Sen. Denise Harper Angel (D-Louisville).

Phone companies in Kentucky

AT&T’s clout in the state capital is unparalleled according to the newspaper:

It employs 31 legislative lobbyists, including a former PSC vice chairwoman and past chairs of the state Democratic and Republican parties, spending about $80,000 last year on legislative lobbying. Its political action committee has given at least $91,000 in state political donations since 2007.

Remarkably, Hornback defended AT&T’s authorship of his bill that would directly benefit the company’s interests.

Nobody knows better than AT&T what the company needs the legislature to do for it, Hornback said.

Bill Shock

Time Warner Cable has redefined bill shock for two of their customers this week as an Ohio man found the cable company trying to bill his credit card $16 million dollars and the Madison County, Ky., Board of Education found their broadband rate going up as much as 1,568 percent.

One of these was a mistake, the other represents a potential nightmare.

Lt. Daniel DeVirgilio received notification from Time Warner Cable his credit card didn’t have a big enough credit limit to sustain the $16,409,107 in charges the cable company tried to get authorized.  The Beavercreek, Ohio resident was taking the billing foul-up in stride, joking with the Dayton Daily News that he probably should have gotten Showtime thrown in at those prices.

Time Warner Cable Southwest Ohio officials on Thursday attributed the $16.4 million figure to human error, according to the newspaper. An employee typed in the wrong number for the amount owed, which caused the company’s automated system to generate the letter.

Unfortunately for DeVirgilio, Time Warner left him on hold for nearly 40 minutes trying to straighten out the billing mess.  No harm was ultimately done to his credit card, but the 26 year old remains concerned Time Warner could have reported the “delinquent” charge to credit reporting agencies.

Madison County, Ky.

The relatively painless resolution DeVirgilio got in Ohio is unlikely to repeated for school officials in Kentucky, reeling from news Time Warner Cable is demanding an enormous rate increase for Madison County Schools’ fiber optic-based broadband network.

The Richmond Register reports local officials were stunned when the cable operator refused to renew their existing contract, which provides service at a cost of $32,000 a year to county residents.  The cable operator instead announced it wanted the school system to pay at least 500 percent more to continue the same level of service in 2011 and beyond: $168,000 a year for county taxpayers with a five year term commitment.

School officials discovered Time Warner Cable was the only provider in the region capable of delivering the type of service the school system requires, and that has given the cable company a safe position to raise prices — dramatically.

Even worse, the Kentucky Department of Education informed the district it could not agree to a five year term even if it wanted to.  Year-by-year service was the only way forward, according to county officials.

In response, Time Warner jacked up the price again — this time by 1,568 percent, potentially costing Madison County taxpayers a whopping $504,000 annually.  Telephone ratepayers will also deliver a piece of their monthly phone bill to the cable operator from Universal Service Funds that will be diverted to cover at least another $750,000 in fees sought for an annual contract.

“It’s been a very frustrating situation from the beginning,” Superintendent Tommy Floyd told the newspaper. “This makes it very difficult for us to continue our ongoing commitment to serve children. I’m going to continue on behalf of Madison County Schools to find the lowest cost provider of services.”

Time Warner also knows time is running out for the school district.  The county must sign a new contract by June 30th or lose its fiber network.  That could be a disaster for the school district.

“We use [the network] all day long in each of our buildings,” Floyd said.

State officials wrote a letter to Time Warner Cable demanding an explanation for the rate increase and stating it was unacceptable.

The state and school officials are still waiting for a response from the cable company, which so far has yet to respond.

[Updated 11:30am ET:  Stop the Cap! received a response yesterday afternoon from Cynthia Godby, Communications Manager for Time Warner Cable in Cincinnati.  In the cause of fairness, and with her permission, we are including her response in full, below:]

AT&T unveiled its U-verse service Monday in Louisville, in a ribbon-cutting ceremony with claims that residents “finally have a choice” for cable service in the area.

AT&T will compete head-on with incumbent cable operator Insight Communications, which has been the only cable provider in Jefferson County for at least a decade.

AT&T promises customers packages starting at $49 a month, as well as digital video recorder set top boxes that can record up to four shows at the same time, and display the recorded programming on any AT&T-wired television in the house.  AT&T also promises residents significant savings when they choose AT&T for video, telephone, and broadband service, and will even include a “quad-play” bundle including AT&T Wireless mobile phone service, resulting in one bill for all AT&T services.

AT&T’s U-verse system is an advanced form of DSL, using a hybrid network of fiber optic cables wired into neighborhoods that interface with ordinary copper telephone wiring that already exists in most Louisville homes.  The technology reduces the costs of wiring every home with fiber optics, but can still offer advanced services “beyond what cable can offer,” according to AT&T.

Consumers across Louisville welcomed the competition.

Tabitha Rhodes told the Louisville Courier-Journal the lack of competition was bothersome.  “It is like there is only one shoe store in town,” she said. “I want 20 shoe stores.”

Rhodes’ husband, Tate, said he hopes AT&T’s competition will force Insight to become a more reliable cable company. Rhodes said their cable service has experienced dropped channels, poor quality pictures, and even pesky neighborhood squirrels that gnawed through the cable line serving his street.

The U-verse service also ties in with an Apple iPhone application, which when run on AT&T’s wireless network allows customers to program their television recording remotely.

Insight customer Rhonda Petr, 44, said she now pays $15 per month for digital video recorder service for each of two television sets in her home, in addition to a bundled monthly subscription for premium cable, phone and Internet service.

Petr said she liked the idea of DVR service without “nickel and dime” charges for each TV set.

Insight Communications dismissed AT&T’s U-verse as little more than smoke and mirrors, according to company spokesman Jason Keller.

“Insight has been Louisville’s technology leader for more than a decade,” company spokesman Jason Keller said Friday.

“One more competitor… won’t change that,” Keller said.

Insight’s system in Louisville is the largest in the company’s nationwide portfolio.  Company officials point to investments Insight has made in the Louisville area to introduce additional services, including “a broadband service that is faster than what AT&T is offering.”

Insight offers 20Mbps service for $17 less than what AT&T charges for 18Mbps, according to one reader.

Insight claims that AT&T is relying on the same old wiring that has been around “since the days of Alexander Graham Bell” to deliver service, and Insight has a “technological advantage in broadband width.”

The question on everyone’s mind is, how much will consumers save?

As the Courier-Journal notes, both are primarily competing on services, not on price:

Both Insight and AT&T offer bundled packages combining telephone, television and Internet starting at about $100 per month.The two compete chiefly on features. For instance, Insight offers faster Internet access, while AT&T is promoting U-Verse’s features that link television, home phone service, wireless phone service, and Internet together.

Rob Enderle, a technology consultant and president of the Enderle Group based in San Jose, Calif., told the newspaper the big savings are found in new customer promotional offers, which he calls “low teaser rates.”  In many Verizon FiOS TV areas that compete with cable, promotional new customer offers also often include long-term contracts lasting 12-24 months.

Incumbent cable companies often launch pre-emptive marketing blitzes to sell their customers on “price protection agreements” just before a competitor comes to town.

“They will try to lock up as many customers as they can,” Enderle told the newspaper.

In Louisville, Insight may have managed to accomplish that with their one-year “price protection agreement” they have managed to sell many of their customers.  The marketing for such agreements promises no price increases for the term of the contract, something that might sound attractive to price-sensitive cable subscribers facing relentless annual rate hikes.

AT&T has no such contract requirements in Louisville, although the company has used them in other markets to lock in customers taking advantage of promotional offers.

Once those promotional offers expire, the two companies will end up charging roughly the same prices for the various packages they offer.  Customers can choose which provider gives them the channels and services they want, as well as which offers better quality service.  The elusive savings, once the promotions expire, are still hard to find.

One Louisville reader called both companies to compare:

Just did a comparison on the different packages AT&T would offer: slower Internet, any additional DVR boxes would be $15/mo (same as Insight), HD channels would be $10/mo (free with Insight), and they would offer no more channels than Insight and both offer garbage as far as programs go. Yeah, I think Insight needs some competition in order to provide its customers with better pricing and better quality, but slower Internet and having to pay to access HD channels is BS. AT&T better come up with something better.

Multiple video news reports about AT&T’s U-verse launch in Louisville can be found below the jump.  Many also include product introductions and short demos.

… Continue Reading

Charter Communications will spend almost $5 billion a part of a multiyear, 24-state broadband buildout to deliver high-speed internet service to more than a million unserved homes and businesses.

Approximately $1.2 billion of the cost to serve these low-density, mostly rural communities will come from the federal government’s Rural Digital Opportunity Fund (RDOF), which is subsidizing some of the expenses associated with providing service in areas deemed unprofitable to serve.

Preparation and planning for Charter’s RDOF Phase 1 broadband buildout has already begun, with an additional 2,000 employees and contractors expected to focus on Charter’s rural expansion efforts in Alabama, California, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Michigan, Missouri, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington, and Wisconsin.

The biggest expansions in coverage area appear to be in North and South Carolina, North and Eastern Wisconsin, East Texas, Ohio, and Eastern Tennessee.

Charter’s RDOF Expansion Project Map

The network Charter will build in these rural areas will offer Spectrum 1 Gbps high–speed broadband access to all newly served customer locations with starting speeds of 200 Mbps, with no data caps, modem fees, or contracts. Customers will also be able to subscribe to Spectrum TV, home phone and wireless mobile service.

Charter CEO Thomas Rutledge said one of the most important factors governing when service will become available is how well the cable company will be received by the owners of utility poles in the various regions.

“The more cooperation we have with the pole owners and utility companies, the faster we can connect these communities with high-speed internet services,” Rutledge said in a company news release. “We look forward to working with local municipalities, electric cooperatives, and investor-owned utilities to ensure that permits are obtained in a timely, fair and cost-effective fashion.”

Comcast has switched back on its data caps and overlimit fees, but is upping allowances 20% — to 1.2 TB, after several years of a 1 TB allowance. Earlier this week, less stingy Cox boosted its caps by 25% to 1.25 TB.

But what Comcast giveth with one hand, it taketh away with the other. Previously, customers that found themselves over the limit had two ‘get out of overlimit fees free’ cards per year, which meant overlimit fees did not apply. Now the company is reducing that to just one free pass per year. But be careful. If you exceed your allowance two or more times during a 12-month period starting with your first instance of going over your allowance, you will receive no more free passes, ever. If you have already exceeded your allowance during 2020, don’t worry, Comcast is resetting their counter to zero this one time.

Exceeding your allowance is costly. Comcast will bill you $10 for each 50 GB you exceed their cap, up to a maximum of $100 a month.

There are three ways to avoid Comcast’s data caps:

First, you can live in a state where Comcast does not cap internet usage. Most of those states are in the northeast. Unfortunately, most states are now data capped by Comcast: Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, New Mexico, Western Ohio, Oregon, South Carolina, Tennessee, Texas, South Carolina, Utah, Southwest Virginia, Washington, and Wisconsin. Note, data caps do not currently apply to Xfinity Internet customers on Gigabit Pro service, Business Internet customers, customers on non-upgradable Bulk Internet agreements (condos, apartments, etc.), or customers with Prepaid Internet.

Second, you can choose the xFi Complete option for a costly $25/month. It includes unlimited data, whole home Wi-Fi service, and a xFi Gateway, including “Advanced Security” to block certain malicious website activity. If you bought these separately, it would cost $44/month. If you already lease a xFi Gateway, you can upgrade to xFi complete for an additional $11/month.

Third, you can purchase Unlimited Data for $30/month if you own and use your own cable modem and router. Existing customers can upgrade to the Unlimited Data plan now by calling 1-800-Xfinity or clicking here.

Data caps, allowances, and overlimit fees are completely arbitrary and do not reflect the actual cost of usage. Comcast argues that heavier users should pay more, even though their cost is nearly the same regardless of usage.