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When Do You “Need” Faster Speeds? When Competition Arrives Offering Them

broadband dead end“We just don’t see the need of delivering [gigabit broadband] to consumers.” — Irene Esteves, former chief financial officer, Time Warner Cable, February 2013

“For some, the discussion about the broadband Internet seems to begin and end on the issue of ‘gigabit’ access. The issue with such speed is really more about demand than supply. Most websites can’t deliver content as fast as current networks move, and most U.S. homes have routers that can’t support the speed already available.” — David Cohen, chief lobbyist, Comcast Corp., May 2013

“We don’t focus on megabits, we don’t focus on gigabits, we focus on activities. We go to the activity set to get a sense of what customers are actually doing and the majority of our customers fit into that 6Mbps or less category.” — Maggie Wilderotter, CEO, Frontier Communications, May 2013

“It would cost multiple billions” to upgrade Cox’s network to offer gigabit speeds to all its customers. — Pat Esser, CEO, Cox Communications, Pat Esser, chief executive of Cox Communications Inc., January 2013

“The problem with [matching Google Fiber speeds] is even if you build the last mile access plant to [offer gigabit speeds], there is neither the applications that require that nor a broader Internet backbone and servers delivering at that speed. It ends up being more about publicity and bragging. There has been a whole series of articles in the paper about ‘I’m a little startup business and boy it is really great I can get this’ and my reaction is we already have plant there that can deliver whatever it is they are talking about in those articles, which is usually not stuff that requires that high-speed.” — Glenn Britt, CEO, Time Warner Cable, December 2012

“Residential customers, at this time, do not need the bandwidth offered with dedicated fiber – however, Bright House has led the industry in comprehensively deploying next-generation bandwidth services (DOCSIS 3.0) to its entire footprint in Florida – current speeds offered are 50Mbps with the ability to offer much higher. We provision our network according to our customers’ needs.” – Don Forbes, Bright House Networks, February 2011

‘Charter [Cable] is not seeing enough demand to warrant extending fiber to small and medium-sized businesses — and certainly not to every household.’ — “Speedier Internet Rivals Push Past Cable“, New York Times, Jan. 2, 2013

Unless you live in Kansas City, Austin, in a community where public broadband exists, or where Verizon FiOS provides its fiber optic service, chances are your broadband speeds are not growing much, but are getting more expensive. The only thing innovative coming from the local phone or cable company is a constant effort to convince customers they don’t need faster Internet access anyway.

At least until a competitor threatens to shake up the comfortable status quo.

Time Warner Cable claims they are perfectly comfortable offering residential customers no better than 50/5Mbps, except in markets like Kansas City (and soon in Texas) where 100Mbps is more satisfying. Why is a glass Time Warner claims is full to the brim everywhere else in the country only half-full in Kansas City? Google Fiber might be the answer. It offers 1,000/1,000Mbps service for less money than Time Warner used to charge for 50Mbps service, and Google is also headed to Austin.

special reportAT&T scoffed at following Verizon into the world of fiber optic broadband, where broadband speeds are limited only by the possibilities. Instead, they built their half-fiber, half-Alexander Graham Bell-era copper wire hybrid network on the cheap and ended up with broadband speeds topping out around 24Mbps, at least in a perfect AT&T world, assuming everything was ideal between your home and their central office.

At the time U-verse was first breaking ground, cable broadband’s “good enough for you” top Internet speed was typically 10-20Mbps. Now that incrementally faster cable Internet speeds are available from recent DOCSIS 3.0 cable upgrades, AT&T is coming back with an incremental upgrade of its own, to deliver around 75Mbps.

It is still slower than cable, but AT&T thinks it is fast enough for their customers, except in Austin, where Google Fiber provoked the company to claim it would build its own 1,000Mbps fiber network to compete (if it got everything on its Christmas Wish List from federal, state, and local governments).

Are you starting to see a trend here? Competition can turn providers’ investment frowns upside down and get customers faster Internet access.

Wilderotter: Most of our customers are satisfied with 6Mbps broadband.

Wilderotter: Most of our customers are satisfied with 6Mbps broadband.

In rural markets were Frontier Communications faces far less competition from well-heeled cable companies, the company can claim it doesn’t believe most of its customers need north of 6Mbps to do important things on the Internet. If they did, where would they go to do them?

Where Comcast and AT&T directly compete, major Internet speed increases are a matter of “why bother – who needs them.” Comcast is more generous where it faces down Verizon FiOS. AT&T also knows the clock is ticking where Google Fiber is coming to town.

Verizon FiOS, Google Fiber, and a number of community-owned fiber to the home broadband networks like EPB in Chattanooga and Greenlight in Wilson, N.C. seem more interested in boosting speeds to build market share, increase revenue to cover their expenses, and make a marketing point their networks are superior. They respond to requests for speed upgrades differently — “why not?”

Verizon figured out offering 50/25Mbps service was simple to offer and easy to embrace. Two clicks on a FiOS remote control and $10 more a month gets a major speed upgrade for basic Internet customers that used to get 15/5Mbps service. Verizon management reports they are pleased with the number of customers signing up.

In Chattanooga, Tenn. EPB Fiber offered gigabit Internet service because, in the words of its managing director, “it could.” The community-owned utility did not even know how to price residential gigabit service when it first went on offer, but the costs to EPB to offer those speeds are considerably lower over fiber to the home broadband infrastructure.

Broadband customers in Chattanooga, Kansas City and Austin are not too different from customers in Knoxville, Des Moines, and Houston. But the available broadband speeds in those cities sure are.

LUS Fiber in Lafayette, La. changed the song Cox was singing about their ‘adequate’ broadband speeds. Earlier this year, Cox unveiled up to 150/25Mbps service to cut the number of departing customers headed to the community owned utility, already offering those speeds.

Convincing Wall Street that spending money to upgrade networks to next generation technology will earn more money in the long run has failed miserably as a strategy.

“Competitors have been overbuilding, investors are wondering where the returns are,” said Mark Ansboury, president and co-founder of GigaBit Squared. “What you’re seeing is an entrenchment, companies leveraging what they already have in play.”

With North American broadband prices rising, and some cable companies earning 90-95% margins selling broadband, one might think there is plenty of money available to spend on broadband upgrades. Instead, investors are receiving increased dividend payouts, executive compensation packages are swelling as a reward for maximizing shareholder value, and many companies are buying back their stock, refinancing or paying off debt instead of pouring money into major network upgrades.

That is not true in Europe, where providers are making headlines with major network improvements and speed increases, all while charging much less than what North Americans pay for broadband service.

UPC Netherlands is Holland's second biggest cable company and it is in the middle of a broadband speed war with fiber to the home providers.

UPC Netherlands is Holland’s second biggest cable company and is in the middle of a broadband speed war with fiber to the home providers.

In the Netherlands, the very concept of Google Fiber’s affordable gigabit speeds terrify cable operators like UPC Netherlands, especially when existing fiber to the home providers in the country are taking Google’s cue and advertising gigabit service themselves. UPC rushed to dedicate up to 16 bonded cable channels to boost cable broadband speeds to 500Mbps in recent field trials, without giving any serious thought to the cable operators in the United States that argue customers don’t need or want the faster Internet speeds fiber offers.

“We had to address it head on very recently because of the fiber (competition)” said vice president of technology Bill Warga. “The company is called Reggefiber in the Netherlands. What they’re touting is a 1Gbps service, [the same speed] upstream and downstream. We came out with 500Mbps service. We had to build a special modem because (DOCSIS) 3.1 chips aren’t out yet. We had to double up on the chips in the modem and put it out there because we had to have a competing product, if anything just in the press. That was a reaction but that tells you how quickly in a marketplace that something can move.”

Despite that, groupthink among cable industry attendees back home at the SCTE Rocky Mountain Chapter Symposium agreed that Google Fiber was a political and marketing stunt, “since the majority of users don’t need those types of speed.”

Who does need and want 500Mbps? Executives at UPC, who have it installed in their homes, admits Warga. But cost can also impact consumer demand. Currently, the most popular legacy UPC broadband package offers 25Mbps for €25 ($32.50). The company now sells 60/6Mbps for €52,50 ($48.75), 100/10Mbps for €42,50 ($55.25) or 150-200/10Mbps for €52,50 ($68.25).

Warga also admits the competition has put UPC in a speed race, and boosted speeds are coming fast and furious.

“They’ll come in and say they’re 100, or 101Mbps we’ll come back and say we’re 110 or 120, or 130Mbps,” Warga said. “It’s a bit of a cat and mouse game, but we always feel like we can be ahead. For us DOCSIS 3.1 can’t come soon enough.”

http://www.phillipdampier.com/video/WSJ Cable Broadband Speeds 1-13.flv

The Wall Street Journal investigates why cable companies are getting stingy with broadband speed upgrades while gigabit fiber networks are springing up around the country. (4 minutes)

Debunking ALEC, Broadband Edition

Not long ago, the United States led the world in broadband connectivity. Now we are in 16th place, trailing most developed nations. We need broadband policies that connect our homes, schools, and business to the 21st century economy, but we’re pursuing public policies that are putting us in a hole, helping private telecommunications providers and harming the public interest. As the old adage goes, when in a hole, stop digging.

Why is this happening? One reason is that across much of the nation, commercial broadband companies are using their political and economic clout to stifle competition, particularly from municipalities. Individually and through trade groups and the American Legislative Exchange Council (ALEC), the industry is bent on shutting down existing publicly-owned broadband systems and blocking the development of new ones.

ALEC’s argument, detailed in a recent Daily Caller op-ed by John Stephenson, director of its communications and technology task force, is based on distorted and inaccurate claims that would be laughable if they weren’t part of a coordinated strategy to radically transform policy state-by-state.

Stephenson suggests that Chattanooga, one of several cities cited in his piece, made a poor decision in building the nation’s most advanced citywide broadband network – one that has helped companies create literally thousands of new jobs in recent years. In fact, contrary to Stephenson’s claims that municipal broadband drive up property taxes and depresses municipal credit ratings, S&P just upgraded the Chattanooga public utility’s bond rating, stating, “The system is providing reliable information to the electric utility on outages, losses and usage, which helps reduce the electric system’s costs.”

The larger point is that those who want to revoke local decision-making authority for broadband often justify their position by insisting that they want to protect taxpayers from mythical threats. The only impact Chattanooga’s system has had on taxpayers has been to create more jobs, lower electricity bills, and enhance choices in the market. Indeed, Chattanooga’s EPB Fiber service is saving the public money. After a recent storm knocked utility customers offline, EPB’s fiber-optic Smart Grid brought those uses back online more quickly, saving the public an estimated $1.4 million in repair costs.

It’s no surprise that such nonsense emanates from ALEC, which acts as a clearinghouse for corporately-sponsored model legislation that puts corporate profits ahead of the public interest and often public safety. ALEC is backed by some America’s biggest telecommunications firms, including Comcast, Verizon, and Time Warner Cable. Through ALEC task forces, corporations craft model bills and find compliant legislators to introduce them as if they were the legislator’s own. As Common Cause and its allies have documented, ALEC’s influence is pervasive: from privatizing education to limiting voting rights with restrictive Voter ID bills, and endangering public safety with “Stand Your Ground” gun laws, no aspect of public policy goes untouched.

ALEC’s attack on local decision-making authority is consistent with its efforts to benefit big companies like Time Warner Cable and AT&T that want to restrict choices for residents and businesses. So far, the big cable companies have all but crushed competition in the private sector and have been attempting to stop communities themselves from building the essential infrastructure in which these companies have been slow to invest.

But the arguments used to revoke local authority are based on misleading or outright false claims. Stephenson even tries to scare readers, claiming (with no proof) that Marietta, Ga. lost $24 million on a municipal network. What actually happened was documented in a report from 2005. Marietta had a wholesale-only network using a far different business model than the one followed by most publicly owned broadband systems.  It was on a path to operate in the black when it was privatized for ideological reasons. Stephenson’s $24 million loss figure ignores all the revenues it generated as well as additional spillover benefits. That’s fuzzy math.

Stephenson’s claim that LUS Fiber lost money every day last year preys on reader ignorance of telecom business models. Any high-capital investment could be said to lose money “every day” in the early years. Long term investments take time to break even – after which, they make money “every day.” Verizon’s FiOS “lost” money every day for many years but is regarded by many as a smart long term investment.

Publicly owned networks overwhelmingly help public safety, schools, libraries and other community anchor institutions. While AT&T has been caught ripping off taxpayers by overcharging schools for their connections, Lafayette, LA. dramatically increased the capacity of school and library broadband connections at nearly the same price AT&T charged for far lower quality services. Lafayette’s network is one of the most advanced in the nation and has attracted hundreds of new jobs while saving millions for the community by keeping prices lower, as documented in our report Broadband at the Speed of LightIn response to Lafayette’s investment, Cox Cable prioritized that community for its upgraded cable network – compounding local benefits.

Lafayette isn’t alone – consider rural Chanute, KN., which connected its schools and the local community college with a gigabit wide area network at only $250 per location per month. The city’s municipal fiber network has helped preserve jobs that were at risk of leaving because the cable and telephone company were not meeting the needs of local businesses. Additionally, the network pays a franchise fee to the general fund every year.

And then there’s Wilson, N.C. Stephenson claims its fiber-optic network might be obsolete before it is paid off – a ludicrous scenario given the strong consensus the fiber-optic is and will remain the gold standard in networking for decades. Regardless, the network is generating benefits today – lower prices for consumers and the best connection available for the hospital and schools. Oh, and their network is operating in the black also.

These benefits are some of the reasons that the FCC’s National Broadband Plan called on Congress to ensure that all local governments could build networks. No one has suggested that every government should do so – but it should be a local choice, and that is what ALEC has been trying to remove. Largely thanks to ALEC, 19 states limit local authority to build networks. Rather than foster competition and innovation, these policies introduce new barriers to connectivity and deny choice to consumers. It is beyond time to remove these restrictions and let local communities decide for themselves if a network is a smart public investment given their unique situation.

This piece courtesy of the Common Cause Blog. The article was coauthored by Christopher Mitchell from the Institute for Local Self-Reliance. He directs their Telecommunications as Commons Initiative. He is also editor of http://www.muninetworks.org/. Follow him @communitynets. 

Payoff: Big Telecom Cuts Big Checks to Legislators Who Outlawed N.C. Community Broadband

The Republican takeover of the North Carolina legislature in 2010 was great news for some of the state’s largest telecommunications companies, who successfully received almost universal support from those legislators to outlaw community broadband service in North Carolina — the 19th state to throw up impediments to a comfortable corporate broadband duopoly.

Dialing Up the Dollars — produced by the National Institute on Money in State Politics, found companies including AT&T, Time Warner Cable, CenturyLink, and the state cable lobby collectively spent more than $1.5 million over the past five years on campaign contributions.  Most of the money went to legislators willing to enact legislation that would largely prohibit publicly-owned competitive broadband networks from operating in the state.

North Carolina consumer groups have fought anti-community broadband initiatives for the past several years, with most handily defeated in the legislature.  But in 2010, Republicans assumed control of both the House and Senate for the first time since the late 1800s, and the change in party control made all the difference.  Of 97 Republican lawmakers who voted, 95 supported HB 129, the corporate-written broadband competition ban introduced by Rep. Marilyn Avila, a legislator who spent so much time working with the cable lobby, we’ve routinely referred to her as “(R-Time Warner Cable).”

Democrats were mostly opposed to the measure: 45 against, 25 for.  Stop the Cap! called out those lawmakers as well, many of whom received substantial industry money in the form of campaign donations.

http://www.phillipdampier.com/video/Community Fiber Networks Are Faster Cheaper Than Incumbents.flv

The Institute for Local Self-Reliance pondered broadband speeds and value in North Carolina and found commercial providers lacking.  (3 minutes)

Telecommunication Company Donors to State Candidates and Political Parties in North Carolina, 2006–2011
Donor 2006 2008 2010 2011 2006–2011 Total
AT&T* $191,105 $159,783 $149,550 $20,000 $520,438
Time Warner Cable $81,873 $103,025 $96,550 $30,950 $313,398
CenturyLink** $19,500 $143,294 $109,750 $30,250 $302,744
NC Telephone Cooperative Coalition $103,350 $94,900 $89,250 $2,500 $290,000
Sprint Nextel $67,250 $17,500 $12,250 $3,250 $100,250
Verizon $8,050 $10,950 $24,250 $2,500 $45,750
NC Cable Telecommunications Association $10,350 $12,500 $500 $0 $23,350
Windstream Communications $0 $0 $1,500 $0 $1,500
TOTAL $481,478 $541,952 $483,600 $90,450 $1,597,481

*AT&T’s total includes contributions from BellSouth in 2006 and 2008 and AT&T Mobility LLC. **CenturyLink’s total includes contributions from Embarq Corp.

According to Catharine Rice, president of the SouthEast Association of Telecommunications Officers and Advisors, HB 129 received the greatest lobbying support from Time Warner Cable, the state cable lobbying association — the North Carolina Cable and Telecommunications Association (NCCTA), and CenturyLink.

Following the bill’s passage, the NCCTA issued a press release stating, “We are grateful to the members of the General Assembly who stood up for good government by voting for this bill.”

CenturyLink sent e-mail to its employees suggesting they write thank you letters to supportive legislators:

 “Thanks to the passage of House Bill 129, CenturyLink has gained added confidence to invest in North Carolina and grow our business in the state.”

http://www.phillipdampier.com/video/CenturyLink Frustration.flv

A CenturyLink customer endures frustration from an infinite loop while calling customer service. Is this how the company will grow the business in North Carolina?  (1 minute)

Consumers Pay the Price

In North Carolina, both Time Warner Cable and AT&T increased prices in 2011.

After the bill became law without the signature of Gov. Bev Purdue, Time Warner Cable increased cable rates across North Carolina.  CenturyLink’s version of AT&T’s U-verse — Prism — has seen only incremental growth with around 70,000 customers nationwide.  The phone company also announced an Internet Overcharging scheme — usage caps — on their broadband customers late last fall.

Someone had to pay for the enormous largesse of campaign cash headed into lawmaker pockets.  For the state’s largest cable operator — Time Warner Cable — another rate increase handily covered the bill.

In all, lawmakers received thousands of dollars each from the state’s incumbent telecom companies:

  • Lawmakers who voted in favor of HB 129 received, on average, $3,768, which is 76 percent more than the average $2,135 received by the those who voted against the bill;
  • 78 Republican lawmakers received an average of $3,824, which is 36 percent more than the average $2,803 received by 53 Democrats;
  • Those in key legislative leadership positions received, on average, $13,531, which is more than double the $2,753 average received by other lawmakers;
  • The four primary sponsors of the bill received a total of $37,750, for an average of $9,438, which is more than double the $3,658 received on average by those who did not sponsor the bill.

Even worse for rural North Carolina, little progress has been made by commercial providers to expand broadband in less populated areas of the state.  AT&T earlier announced it was largely finished expanding its U-verse network and has stalled DSL deployment as it determines what to do with that part of its business.

In fact, the most aggressive broadband expansion has come from existing community providers North Carolina’s lawmakers voted to constrain. Salisbury’s Fibrant has opted for a slower growth strategy to meet the demand for its service and handle the expense associated with installing it.  Wilson’s Greenlight fiber to the home network supplies 100/100Mbps speeds to those who want it today.

In Upside-Down World at the state capitol in Raleigh, community-owned providers are the problem, not today’s duopoly of phone and cable companies that deliver overpriced, comparatively slow broadband while ignoring rural areas of the state.

Key Players

Some of the key players that were “motivated” to support the cable and phone company agenda, according to the report:

Tillis collected $37,000 from Big Telecom for his last election, in which he ran unopposed. Tillis was in a position to make sure the telecom industry's agenda was moved through the new Republican-controlled legislature.

Thom Tillis, who became speaker of the house in 2011, received $37,000 in 2010–2011 (despite running unopposed in 2010), which is more than any other lawmaker and significantly more than the $4,250 he received 2006–2008 combined. AT&T, Time Warner Cable, and Verizon each gave Tillis $1,000 in early-mid January, just before he was sworn in as speaker on January 26. Tillis voted for the bill, and was in a key position to ensure it moved along the legislative pipeline.

The others:

  • Senate President Pro Tempore Phil Berger received $19,500, also a bump from the $13,500 he received in 2008 and the $15,250 in 2006. He voted for the bill.
  • Senate Majority Leader Harry Brown received $9,000, significantly more than the $2,750 he received in 2006 and 2008 combined. Brown voted in favor of the bill.
  • Democratic Leader Martin Nesbitt, who voted for the bill, received $8,250 from telecommunication donors; Nesbitt had received no contributions from telecommunication donors in earlier elections.

The law is now firmly in place, leaving North Carolina wondering where things go from here.  AT&T earlier announced it had no solutions for the rural broadband challenge, and now it and other phone and cable companies have made certain communities across North Carolina don’t get to implement their solutions either.

What You Can Do

  1. If you live in North Carolina, check to see how your elected officials voted on this measure, and how much they collected from the corporate interests who supported their campaigns.  Then contact them and let them know how disappointed you are they voted against competition, against lower rates, against better broadband, and with out of state cable and phone companies responsible for this bill and the status quo it delivers.  Don’t support lawmakers that don’t support your interests.
  2. If you live outside of North Carolina and we alert you to a similar measure being introduced in your state, get involved. It is much easier to keep these corporate welfare bills from becoming law than it is to repeal them once enacted.  If you enjoy paying higher prices for reduced service and slow speeds, don’t get involved in the fight. If you want something better and don’t appreciate big corporations writing laws in this country, tell your lawmakers to vote against these measures or else you will take your vote elsewhere.
  3. Support community broadband. If you are lucky enough to be served by a publicly-owned broadband provider that delivers good service, give them your business.  Yes, it may cost a few dollars more when incumbent companies are willing to slash rates to drive these locally owned providers out of business, but you will almost always receive a technically superior connection from fiber-based providers and the money earned stays right in your community. Plus, unlike companies like CenturyLink, they won’t slap usage caps on your broadband service.

http://www.phillipdampier.com/video/Time Warner Cable -- Fiber Spot.flv

What do you do when your company doesn’t have a true, fiber to home network and faces competition from someone that does?  You obfuscate like Time Warner Cable did in this ad produced for their Southern California customers. (1 minute)

Time Warner Cable Will Launch Wideband in North Carolina’s Triad Region

Time Warner Cable is finally getting around to announcing its DOCSIS 3 “wideband” broadband upgrades in the Triad region of North Carolina.  Already available in Charlotte, Time Warner will offer 30/5Mbps service for $10 more than its Turbo service, and 50/5Mbps will also be available for $99.95 a month.

Customers in High Point will be the first to get access to the service in the spring, while other Triad cities will get the service later this year, according to a news release from the cable company.

The Triad region was part of Time Warner Cable’s 2009 Internet Overcharging experiment, which would have tripled pricing for unlimited broadband service to $150.  An outcry from residents forced the company to shelve its plans.

Triad residents are not impressed by Time Warner’s foot-dragging ever since.

Stop the Cap! reader Gene in Greensboro hasn’t forgotten the cable company promised speed upgrades in 2009 as part of its usage cap experiment.

“Other cities in North Carolina that were not on the list for their ripoff pricing got the upgrades while Greensboro drags at the same speeds we’ve had for several years now,” Gene says. “I think this announcement has more to do with the imminent arrival of AT&T’s U-verse in some areas of the Triad.”

AT&T is slowly expanding its U-verse footprint in central North Carolina.

The state is currently embroiled in a political debate over Time Warner-sponsored legislation that would largely eliminate community-owned broadband competition across North Carolina.

“I would trade Time Warner and AT&T for Wilson’s GreenLight fiber in a second,” Gene says. “Both AT&T and Time Warner are playing a snail’s game of incremental upgrades in this state that makes us also-ran when compared to New York, New Jersey, or Connecticut.”

Time Warner Cable Broadband Pricing, North Carolina

Road Runner® Broadband (10 Mbps download, 1 Mbps upload)
Standalone $57.95/mo
With Broadcast/Basic Cable and/or Digital Home Phone $52.95/mo
With Digital TV $47.95/mo
Road Runner® Broadband Turbo (15 Mbps download, 1 Mbps upload)
Requires subscription to Road Runner® Broadband
Additional $9.95/mo
to Broadband rate
Road Runner® Broadband Extreme – Charlotte (30 Mbps download, 5 Mbps upload)
Requires subscription to Road Runner® Broadband
Includes Wireless Home Networking
Additional $20.00/mo
to Standard Broadband rate
Wideband Internet (50 Mbps download, 5 Mbps upload)
Includes Wireless Home Networking
$99.95/mo
Road Runner® Basic (1.5 Mbps download, 256 kpbs upload) $40.95/mo
Road Runner® Lite (768 kbps download, 128 kbps upload) $30.95/mo
WiFi Home Network (up to 4 computers) $9.95/mo

 

N.C.’s Fastest & Cheapest Broadband Comes from Community-Owned Networks Some Want to Ban

A new report proves what Stop the Cap! has advocated for more than two years now — communities seeking the fastest, most-modern, and most aggressively priced broadband can get all of that and more… if they do it themselves.

The concept of community self-reliance for broadband has been dismissed and derided for years among small government conservatives and corporately-backed dollar-a-holler groups who claim government can’t manage anything, but when it comes to broadband in the state of North Carolina, the evidence is in and it is irrefutable — Tar Heel state residents are getting the most bang for their broadband buck from well-managed and smartly-run community-owned broadband networks.

Christopher Mitchell from the New Rules Project — part of the Institute for Local Self-Reliance, gathered evidence from North Carolina’s different broadband providers and found the best broadband services come from local communities who decided to build their own fiber networks. instead of relying on a handful of cable and phone companies who have kept the state lower in broadband rankings than it deserves.

North Carolina is undergoing a transition from a manufacturing and agricultural-based economy that used to employ hundreds of thousands of workers in textile, tobacco, and furniture manufacturing businesses.  In the last quarter-century, the state has lost one in five jobs to Asian outsourcing and America kicking the tobacco habit.  Its future depends on meeting the challenges of transitioning to a new digital economy, and major cities like Charlotte, Raleigh, and Greensboro have risen as well-recognized leaders in engineering, biotech, and finance.

But for rural and suburban North Carolina, success has been hindered by a lack of necessary infrastructure — particularly broadband for small businesses and entrepreneurs.  It becomes impossible to attract high tech jobs to areas that are forced to rely entirely on low speed DSL service, if that is even available.

In communities like Wilson and Salisbury, long frustrated by area providers not delivering needed services, a decision was reached to build their own broadband infrastructure — modern fiber to the home networks worthy of the 21st century.

Mitchell’s report charts the benefits available to every resident, as communities with state-of-the-art fiber networks consistently deliver the most robust service at the lowest prices, all without risk to local taxpayers.  Better still, when the network construction costs are paid back to bondholders, future profits generated by the community-owned systems will be plowed back into local communities to reduce tax burdens and keep service state-of-the-art.

“Comparing the tiers of residential service from Wilson or Salisbury against the providers in the Raleigh area shows that the communities have invested in a network that offers far faster speeds for less money than any of the private providers,” Mitchell concludes.  “Whether communities in North Carolina are competing against other states or internationally for jobs and quality of life, they are smart to consider investing in a community fiber network.”

Mitchell’s report arrives just a few weeks after voters handed North Carolina’s General Assembly to GOP control for the first time in more than a century.  Both cable and phone companies in the state modestly suggest that is good news for their legislative agenda, which is an understatement equal in proportion to the historic handover of control of both the House (67-52) and the Senate (31-19).  The top items on the agenda of incoming members is a checklist of conservative activist favorites, including a war on unions, mandatory ID cards for voting, opting the state out of recently enacted health care reform, an eminent domain constitutional amendment, sweeping deregulation reform to favor business interests, and redistricting to “restore fairness” in future elections.

The state’s big cable and phone companies are convinced with a list like that, they can come along for the legislative ride and get their agenda passed as “pro-business reform.”  That means a much larger fight in 2011 for the inevitable return of corporate protection legislation banning exactly the kinds of municipal networks that are delivering North Carolina better, faster, and cheaper broadband.

Happy Rate Increase Tuesday: Time Warner Cable Back for More from North Carolinians

Time Warner Cable customers in North Carolina are getting rate hike letters from the cable company that foreshadows what other Time Warner Cable customers around the country can expect in the coming months.

For residents in Charlotte and the Triad region, Time Warner is boosting prices for unbundled customers an average of six percent, which will impact customers not on promotional plans or who are not locked into a “price protection agreement.”

The rate increases particularly target standalone service customers.  Those with the fewest services will pay the biggest increases.  Those who subscribe to cable, phone, and broadband service from the company will suffer the least.

A Time Warner Cable spokesman claimed the company is just passing on the cost of programming.

WXII-TV in Greensboro reported that for many customers already struggling with their bills, they don’t want to hear anything about a price hike.

“I think it’s ridiculous at this time with the economy — it’s hard to make it as it is,” one customer told the station.

“I wish there was a better option out there, but it’s about the only thing you can get,” said another viewer.

Time Warner has been developing pricing models that increasingly push customers towards bundled packages of services.  Standalone broadband service saw dramatic price increases in many areas in 2010, and the company’s most aggressive new customer promotions encourage customers to take all three of its services.

But broadband customers need not expose themselves to inflated broadband prices for standalone service.  Most Time Warner Cable franchises offer Earthlink broadband at comparable speeds at prices as low as $29.95 per month for the first six months.  When the promotion expires, customers can switch back to Road Runner at Time Warner’s promotional price.

Time Warner does face competition in some areas of North Carolina from AT&T U-verse, which offers attractive promotional pricing for new customers.  But the phone company’s broadband speeds come up short after Time Warner boosted speeds across much of the state.  The cable company now delivers Road Runner at speeds of up to 50/5Mbps.  AT&T tops out at 24Mbps, and not in every area.

When a competitor can’t deliver the fastest speeds, they inevitably claim consumers don’t want or care about super-fast broadband.

“We are focused on offering the broadband speeds that our customers need, at a price that they can afford,” said AT&T spokeswoman Gretchen Schultz.

Greenlight promotes its local connection to Wilson residents

Some North Carolina consumers are watching AT&T’s slower speeds and Time Warner’s price hikes from the sidelines, because they are signed up with municipal competitors.

Residents in Wilson with Greenlight service from the city don’t have to sign a contract to get the best prices and obtain service run and maintained by Wilson-area employees. The provider has embarked on a campaign to remind residents that money spent on the city-owned provider stays in the city.

In Salisbury, Fibrant is making headway against incumbent Time Warner as it works through a waiting list for customers anxious to cut Time Warner’s cable for good.  Fibrant customers are assured they’ll always get the fastest possible service in town on a network capable of delivering up to 1Gbps to businesses -and- residents.

MI-Connection, the rebuilt former Adelphia cable system now owned by a group of local municipalities is managing to keep up with Time Warner with its own top broadband speeds of 20/2Mbps.  The system is comparable to a traditional cable operator and does not provide fiber to the home service.  Its 15,000 customers in Mooresville, Cornelius and Davidson are likely to stay with the system, but it is vulnerable to Time Warner’s bragging rights made possible from DOCSIS 3 upgrades.  Since Time Warner does not provide service in most of MI-Connection’s service area, city officials don’t face an exodus of departing customers.

But that could eventually change.  Some MI-Connection customers have reported to Stop the Cap! they have begun to receive promotional literature from Time Warner Cable for the first time, and there are growing questions whether the cable company may plan to invade some of MI-Connection’s more affluent service areas.  Cable companies generally refuse to compete with each other, but all bets are off when that cable company is owned by a local municipality.

For most North Carolina residents, AT&T will likely be the first wired competitor, with its U-verse system.  To date, U-verse has drawn mixed reviews from North Carolina consumers.  Many appreciate AT&T’s broadband network is currently less congested than Road Runner, and speeds promised are closer to reality on U-verse compared with Road Runner during the early evening.  But some AT&T customers are not thrilled being nickle-and-dimed for HD channels Time Warner bundles with its digital cable service at no additional charge.  And for households with a lot of users, AT&T can run short on bandwidth.

“We have five kids — three now teenagers, and between my husband’s Internet usage and me recording a whole bunch of shows to watch later, we have run into messages on U-verse telling us we are trying to do too much and certain TV sets won’t work until we reduce our usage,” writes Angela.  “AT&T doesn’t tell you that you all share a preset amount of bandwidth which gets divided up and if you use it up, services stop working.”

Angela says when she called AT&T, the company gave her a $15 credit for her inconvenience, and the company claims it is working on ways to eliminate these limits in particularly active households.  For now, the family is sticking with U-verse because the broadband works better in the evenings and she loves the DVR which records more shows at once than Time Warner offers.  Their U-verse new customer promotional offer saves them $35 a month over Time Warner, at least until it expires.

“From reading about Fibrant and Greenlight on your site, my husband still wishes we lived in Salisbury or Wilson because nothing beats fiber, but at least what we have is better than what we used to have,” she adds.

http://www.phillipdampier.com/video/WXII Greensboro TWC Raising Rates 11-16-10.flv

WXII-TV in Greensboro reports of Time-Warner Cable’s rate hikes for the Piedmont Triad region of North Carolina.  (2 minutes)

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  • arby: Such a pain to get a better deal. But better than when Cable was a Monopoly and there were no other choices. I am in the middle of a 2 year deal...
  • doug: not for Fort Collins, is this just a short delay or no increase at all? I am in Fort Collins and have been waiting for this upgrade. arggg....
  • Linda: AGREE! We shouldn't be paying extra for ECHO....
  • JC: I didn't do this on purpose but it worked: Comcast came to my door - I usually politely listen but say no thanks. But I listen to see what they mi...
  • Ben: Had: U200, Max Turbo 24MBs, 2 Additional TV Recievers, $129+tax called just now, 1st year promotional price ends in 3 days. Now (with one year c...
  • fjfdybvfgj: What TW wants to do is keep it a secret so that they can pocket 90% of the money and say it wasn't enough to connect the rural areas. We shouldn't spe...
  • Howie: I feel that the taxpayers of New York State have the right to know how their tax money is being spent. If T-W wants to keep how it spends money on i...
  • AC: What I'd love to see is the total amount of federal money AT&T received and the promises they were to have done by now....
  • Seattle: They doubled the download speed but not the upload. So now my speed is 100-120 down but only 10 up....
  • Paul Houle: This the kind of "leadership" we are getting out of Cuomo, unfortunately. It reminds me of his "bold" initiative to bring more gambling to NY, so...
  • fjfdybvfgj: The Data Usage represented is usually the norm for most people by themselves. In a family of 5 and our usage is usually around 6TBs normally and is ~9...
  • Bryan: Awesome article Just got 12MB and U-200 with HD included free for $93 a month. Also made them throw in movie channels for a month free....

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