"Hey, we're #19!"

The United States may be a leader in many things, but broadband isn’t one of them. The country has now fallen two more positions — to 19th place, behind South Korea, Sweden, Denmark, the United Kingdom, and even Iceland, since the Berkman Center for Internet and Society released its last rankings in 2009.

In 2004, President George W. Bush complained about the U.S. falling to 10th place, which he declared was “ten spots too low.”

Now eastern Europe and former Soviet Republics in the Baltics threaten to overtake the United States, and countries in southeast Asia already have.  Innovation in the United Kingdom, Australia and New Zealand means deploying fiber to the home service to the vast majority of the population.  Innovation in North America means conjuring up new pricing schemes to raise prices on broadband service and engage in competition-busting mergers and acquisitions.

But a USA Today editorial this week also places much of the blame on corporate influence inside Washington, which has promulgated legislative policies that favor telecommunications companies and throw customers under the bus.

“The simple answer is that other countries have policies that promote competition and innovation,” the editors write. “In contrast, policies here have allowed a few dominant players that control the least interesting parts of the broadband landscape (the cables and the wireless spectrum) to dominate.”

Indeed, a series of telecommunications laws enacted by Congress, combined with short-sighted policies at the Federal Communications Commission, have allowed a handful of super-sized players to own and control broadband service in America, resulting in providers establishing non-competing fiefdoms that avoid head-on competition.

The worst policy of all allowed broadband providers to keep competitors from reaching customers over existing broadband networks.  During the days of dial-up, you could purchase Internet access from the phone company, a large provider like MSN or AOL, or thousands of smaller regional and local service providers.  Simply dial a local access number and you were connected to the provider of your choice.  Now, U.S. law gives broadband network operators the right to restrict these independents from selling service over their networks.  Comcast need not sell anything other than Comcast Internet.  Frontier Communications can make a killing selling its own DSL service, while protecting that revenue from other Internet Service Providers who might sell the service over Frontier’s network for half the price.  Time Warner Cable voluntarily allows Earthlink and a handful of other companies to sell cable broadband service over its infrastructure, but at prices equal to or higher than what Time Warner charges itself.

Broadband providers argue that allowing competitors to sell service on their network would discourage future investment and rob shareholders a return on investments already made.  Today, major cable operators and phone companies are falling all over themselves denying they are in anything but the broadband business.  It has become an enormously lucrative enterprise, more profitable than television or telephone service.

USA Today compares the broadband landscape back home with that in South Korea — perennially the world’s fastest, and considerably less expensive than what North Americans pay for service:

South Korea has made broadband a national priority, mandating deployment and in some cases giving private companies incentives to build out. It has also prevented major players from monopolizing their businesses, encouraging competition and innovation. In South Korea, consumers can get broadband service from a cable or telecom company. But they may also choose among myriad independent providers that are given access to the physical infrastructure. This competition keeps prices down and the quality of service high.

[...] But over time, cable and telecom companies worked the courts and Congress to make sure that this competitive world would never come to be [in the United States]. [...] Wireless is a bit better. But the market has remained a near duopoly, with none of the smaller players emerging as a strong competitor to AT&T and Verizon.

The same open network concept has fought its way forward in Canada (where Bell has worked furiously to sabotage the business plans of independent providers) and in the United Kingdom, Australia and New Zealand where all three governments have decided the best solution would be to scrap the ancient landline network and start fresh with an open-to-all-comers fiber to the home service.

Back home in the States it is business as usual with increasing broadband prices and the looming prospect of usage-limiting schemes designed to cut capital costs, monetize broadband usage, and stop cord-cutting.

The opposing point of view comes courtesy of dollar-a-holler, corporate-backed think tank The Heartland Institute, who is stuck quoting notorious industry-funded studies and think tanks like the Discovery Institute and the Technology Policy Institute:

The idea that European and Asian countries are lapping America in the race for broadband speed and penetration is a fallacy created with statistics comparing “persons” instead of “households.” Once you make that correction, the USA is firmly planted among the top of industrialized nations, as economist Scott Wallsten pointed out when he was a staffer at the Federal Communications Commission in 2009.

And as tech researcher Bret Swanson of Entropy Economics points out, if you measure Internet usage by gigabytes used per month — a better measure of the speed and utility of networks — the USA has nearly lapped Western Europe once and Asia twice.

Heartland Institute: "By not disclosing our donors, we keep the focus on the issue."

If you measure how many mouse clicks customers in New York make on a Thursday afternoon, we could be number one as well!  Gigabytes used per month does not measure the speed or price of service on broadband networks, considerations that actually do impact broadband rankings.

Mr. Wallsten is a familiar favorite go-to-guy for The Heartland Institute.  He’s also the choice of Time Warner Cable, who paid him $20,000 for a 2010 essay: “The Future of Digital Communications Research and Policy.”

There is big money to be made writing corporate-funded research reports.  Bret Swanson knows that very well, having been involved with the Discovery Institute, a “research group” that delivers paid, “credentialed” reports to telecommunications company clients who waive them before Congress to support their positions.  Swanson is also a “Visiting Fellow” at Arts+Labs/Digital Society, which counted as its “partners” AT&T and Verizon.

The gentleman from Heartland also quotes from the misnamed “Progressive Policy Institute,” which counts among its funding partners, AT&T.

It would have been probably easier (but ineffectively transparent) to simply quote from AT&T and Comcast directly.

The Heartland Institute, unsurprisingly, believes letting existing broadband providers deliver service exactly the way they want is the best option:

The digital economy — one of the only vibrant economic sectors left — doesn’t need more government “investment” or regulation. It needs only for government to butt out and let the market work the magic that continues to bring us the marvels of the modern age.

That magic will cost you $50 a month and rising.  If some providers have their way, while the rest of the world abandons usage caps, American providers can’t wait to slap them on, reducing the value of your service even further.

Rogers Cable lets their customers purchase this cable box outright to avoid rental charges.

Stephen Simonin first came to our attention in January 2010 when he proposed charging cable operators room and board for their expensive cable set top boxes they require subscribers to rent.  Now, the chairman of the Litchfield (Conn.) Cable Advisory Council is back with another salvo — demanding an end to mandatory rental charges for cable TV equipment and access to competing providers:

The biggest industry in the US that has money for jobs is the entertainment industry. Federal law requires Cable to carry local broadcast and public channels in the clear for all. If we contact our Federal representatives and ask them to add: “Must carry adjacent competitors programming” We would add a million USA jobs immediately. Paid for by corporate cable and NOT tax dollars!

Cable has forced all of us to RENT cable boxes. We are not allowed to buy them because this is guaranteed free revenue forever for them. A box costs less than $100 and we pay nearly $10 a month for rental and power each month. Cablevision makes over $1,000,000,000 a year on set top box rentals alone. This is only one company! They have compressed TV to less than 20% of the transport. They use the other 80% for business and not covered under TV franchise (Wi-Fi, data, phone business). However, they use the TV franchise for this monopoly access to our front doors.

Adding this must carry clause will allow up to 5 different cable providers at our front doors for lower costs, higher quality and real competition. Cable will not want to give up that fat 80% business revenue they have today and will need to add a new fiber/co-ax transport across the country on their nickel! Think how many local jobs $1,000,000,000 can pay for. Now remember that we have several cable companies here in CT!

These are American jobs! Please help us get this passed! Call our Federal Congressman and Senators today. Remind them of the details I have sent them on behalf of the People.

Simonin’s proposal, sent to Stop the Cap!, enjoys some precedent… in Canada.

Sky Angel, a Christian television distributor, abandoned satellite in favor of IPTV several years ago. Their subscribers watch Sky Angel's channel lineup over a broadband connection.

Consumers there can purchase cable boxes in stores like Best Buy ranging from $80 for a refurbished unit that works with Shaw Cable to $500 for a cable box with DVR designed for Rogers Cable customers.  Buying your own box puts an end to rental fees, often $7+ per month, which never stop, even after the box is effectively paid for in full.  But for those seeking a built-in DVR, the initial price tag is on the steep side.  The practice of buying boxes has also generated some surprising competition between Rogers and itself.  When customers call to inquire about new service, Rogers often includes discounts including free box rentals, making it unnecessary to purchase the box at all (as long as you remember to re-negotiate an extension of the promotion when it ends).  That’s a savings of nearly $100 a year for some customers.  Buying DVR equipment guaranteed to work with your current provider also makes it easy to upgrade the device with larger capacity hard drives that can store more programming.  Since the failure point for most DVR’s is the hard drive, occasional replacements and upgrades can keep a box running for years.  Many pay providers in the United States charge higher rental prices for higher capacity equipment, with no option to buy.

Simonin’s proposal to open up cable networks to other providers is more novel, and probably a lawyer’s dream come true for the endless litigation it offers.  It’s highly unlikely the courts will side with the notion of forcing cable operators to open their infrastructure to competing providers, and considering the amount of informal collusion between companies today, it’s probably not going to deliver much savings.

A bigger hope on the horizon is the ongoing march to IPTV — television programming delivered using Internet technology.  With strong Net Neutrality policies in place (and a strong position against Internet Overcharging with usage caps or usage-based billing), dozens of new virtual “cable companies” could be launched, delivering their lineups over the Internet, direct to computer and television screens.  That could deliver consumers an endless choice of providers, assuming regulatory oversight is in place to make sure programming is available to all at fair and reasonable prices and that broadband providers are not allowed to block or impede access to the offerings that result.

It’s much easier to do an end run around Big Cable than trying to find a way to get them to change their business plans.

Are you using too much Internet service?  If your service provider thinks you are, it can alert you by barging in on your web-browsing sessions with forced notification messages warning you are about to be the latest victim of Internet Overcharging.

PerfTech, a maker of browser messaging systems has teamed up with Active Broadband Networks to deliver providers a way to notify up to two million subscribers about their broadband usage from just a single rack-based system.

“Feedback from ISPs who have deployed usage-based Internet tiers has confirmed that two factors are key to success: accurate usage measurement and quick, proactive notifications,” PerfTech vice president of sales Jane Christ said in a statement.

Most browser message injection systems are used to warn customers when they are approaching monthly usage limits or excessive use charges.  Some can even redirect web users to a single ISP-administered website to alert them their service has been suspended or request payment for additional usage with a credit card.

So far, only smaller U.S. providers are using PerfTech’s system, including WideOpenWest, BendBroadband in Oregon, and Buckeye Cable in Ohio.

• WideOpenWest doesn’t appear to limit usage except for newsgroups.  According to their FAQ, users may download up to 5GB per month of newsgroup content;
• Bend Broadband has a 100GB monthly limit on all but its highest speed Internet plan, which carries a 150GB monthly limit.  The overlimit fee is $1.50 per gigabyte.
• Buckeye Cable favors “network management” techniques, which can slow down customers deemed to be using too much, at its discretion.  But the company does have a 3GB strict usage cap on newsgroup access.  Exceeding it is very costly.  The overlimit fee is a whopping $45 per gigabyte.

While Australian officials promote the noble aspects of its new fiber-based National Broadband Network to power commerce, health care, and education, one content and applications developer says the prospect of improved “adult entertainment” options will drive demand for fiber broadband adoption in Australia, just as it has in many other countries.

Jennifer Wilson, project director for The Project Factory, took discussions about the decidedly-adult topic of online content private to be certain it did not overshadow the more virtuous-aspects of the fiber network.

“The single most important factor is the porn factor because pornography has always been at the cutting edge of technology,” Wilson said. “If we cannot get porn on the NBN than we will have trouble getting consumer acceptance and uptake.”

Australia is just starting a debate about the appropriateness of adult entertainment on a publicly-owned network — a debate familiar to community broadband providers who face scrutiny over adult video content often found on municipally-owned cable systems.

Access to adult content and keeping it away from children is now evolving into a secondary debate about the NBN, and some politicians are considering placing adult content controls on the network.

For Wilson, that would be a major mistake.

Speaking at an Australian Computer Society (ACS) forum in Sydney, Wilson said giving parents the tools to control viewing options was perfectly appropriate, but a national policy banning pornography on the NBN would be a disaster.  Wilson believes adult content has always “stimulated” digital growth, and even, in her view, forced a final decision on which high definition DVD format would become the primary standard — Blu-Ray or HD.

“The main reason Blu-Ray took off was because the adult entertainment industry chose the format over HD,” Wilson said. “No one is going to install the NBN on the basis that one day they might need e-health services but they will use that as a justification for getting the service in order to download movies and watch TV.”

Australian technology evangelists of all kinds favor an agnostic approach to content, keeping government out of the viewing rooms of individual NBN subscribers.  Some have gone as far to say adult content will represent an enormous revenue opportunity — one that will help pay off the expense of constructing the network.

That moral dilemma — porn accelerating profit for the NBN, has politicians in a quandary over whether that represents government promotion of adult content for financial reasons.

“Which is exactly why the government needs to stay as far away from this debate as possible,” Jeffrey Maindonald, a Unitarian Universalist tells Stop the Cap! “Give people the tools to make personal decisions for themselves and their families, but stay out of the content and leave that to the authorities when it crosses the legal line.”

Maindonald, a retired minister, accepts adult content has driven everything from home video recording, film cameras, the Internet, and now the possibilities of what can be done with fiber broadband.  For him, it’s an extension of the inevitable debate between “good” and “evil” mankind deals with everywhere else.  Enforcing self-defined moral laws online is a highly subjective business, Maindonald says, one that will simply lead to endless debate and clashes.

“Thankfully, the new network has virtues that extend far beyond a virtual red light district,” Maindonald says, hoping the debate won’t derail the country’s fiber broadband future.

“A colleague of mine, an Anglican archdeacon, told me he was amazed that the most modern technology was being used to still obsess over God’s miracle of the human body,” Maindonald adds. “It won’t stop with the NBN.”

New Zealand’s Commerce Commission is planning to study Internet Overcharging schemes from Internet Service Providers as part of a review of the government’s planned investment of $1.35NZD billion to construct a state-subsidized fiber broadband network.

At issue is whether the government’s investment in broadband will not deliver value for money if broadband providers sell heavily usage-capped broadband services over the country’s new network.

The Commerce Commission serves as New Zealand’s antitrust regulator, charged with finding marketplace abuses and correcting them, especially in the absence of competition.  Included in the wide-ranging review:

• Network peering: Allowing broadband traffic to flow freely between Internet Service Providers without interference or punitive expense;
• Data caps: Whether ISPs will continue to limit broadband usage on a network paid for by public funds, pocketing the proceeds;
• Net Neutrality: Ensuring that content over the network is treated fairly and equally.

“Our aim is to promote competition in telecommunications markets for the long-term benefit of end-users of telecommunications services in New Zealand,” Telecommunications Commissioner Ross Patterson said in a statement. “The study will result in a report which will identify any factors which may inhibit the uptake of ultra-fast broadband services.”

Most of the investigation will likely target New Zealand’s dominant phone company – Telecom New Zealand.  The former state-owned monopoly has rebuilt part of its market dominance pitching broadband service across the country over its landline-based DSL network, by which most New Zealanders obtain broadband.  While the company competes with other providers who resell service over Telecom phone lines, many critics charge the phone company position as the owner of the infrastructure gives it a powerful position in the market.

The New Zealand government hopes to retire its aging copper-wire telephone network and replace it with a combination of fiber optics in cities and towns and fixed wireless service in rural areas.  A discussion paper is expected from the commission by June, with a final report due in December.

Phillip Dampier

In response to one of our pieces today about AT&T, I replied to a reader’s question about why providers are not subject to oversight when it comes to their traffic meters.  The answer is, providers want all of the benefits their monopoly/duopoly status deliver, with none of the oversight and regulation that is supposed to come along with the deal.

When I am asked by reporters if our group would support the concept of usage-based billing if prices were lower, I know some education is in order before answering.

Frankly, what providers define as “usage-based billing” isn’t really usage-based at all.  It’s simply a double-tiered pricing scheme.  Consumers already pay for broadband service based on speed, which informally includes a usage limit of sorts — your maximum amount of consumption is governed by the speed of the connection you purchase.  Not satisfied with the enormous profits already earned selling broadband that way, some companies want to monetize Internet use by inserting usage limits or inserting a new tier of service based on usage allowances, which generally increase with higher-priced levels of service.

When broadband providers attempt to use the argument consumers already pay for usage of essential services like water, gas, and electricity, they are trying to conflate broadband traffic much the same way.  But apart from the fact broadband carries no generation costs and represents a limitless resource, the “fairness” argument falls apart when you consider the provider is effectively double-charging customers by implementing a use-based pricing scheme on top of a speed-based pricing model.

The equivalent would be charging you today’s prices for gas, electric, or water service, but then adding a surcharge or tax based on how fast or when you are using the service. Here’s the kicker: they are not lowering the price of their speed-based tiers, they are simply layering a use tax on top.  In short, it extra-bills customers for what they already paid for.

A true usage-based billing scheme would carry a monthly minimum charge for infrastructure costs (maintenance of the delivery system, meter measurements, etc.) and a traffic cost.  In a regulated utility environment, most providers are required to sell service at a price verified by regulators to cover costs and a small profit.  No gouging.  No provider dares sell service under these terms because it would dramatically slash the cost most consumers pay for the service.  Instead, they sell “usage tiers” that include arbitrary “allowances” that provide no rollover or discount for unused traffic.

Imagine what would happen if AT&T or Comcast sold broadband like electricity?

CartelCountry Broadband & TV

From coast to coast, we put the cartel in cable!

• Monthly Minimum Charge: $9.95
• Broadband traffic delivery $0.05/GB
• Amount consumed 20GB = $1.00

• Payment Due: $10.95

Thank you for your prior payment of $9.95. We hope you enjoyed your vacation. No broadband traffic consumed equals no broadband traffic charges.

That is why there is no such thing as true usage-based billing. Providers wouldn’t dare because they would lose the enormous income they earn from those “98 percent” of “light users” they keep suggesting are in the majority.

Even “heavy users” probably would not object to this kind of pricing. A 500GB per month user would pay $34.95 at these prices, and providers would STILL be making a profit.

BitTorrent, the company behind the popular file sharing protocol routinely blamed by providers for overburdening broadband networks and by Hollywood for distributing pirated content, took a tentative step today to oppose Internet Overcharging schemes.

Eric Klinker, CEO wrote a guest piece for GigaOM calling out AT&T for its announced 150-250GB usage caps:

While the trend toward metered bandwidth is not inherently pro-consumer, ISPs have staked out a singular public rationale: data caps are necessary to limit the consumption of “bandwidth hogs” in order to protect the network experience for everyone else. Such concepts are simplistic and easy to imagine. They are also completely wrong.

And with that, Klinker stumbled into a public relations and marketing effort defending the company’s culpability for increasing broadband traffic, and proposing a resolution for their ‘part of the problem’:

Since any data traffic that doesn’t induce congestion on a fixed cost network is essentially free; applications can voluntarily play a role in traffic prioritization. And since BitTorrent is a high percentage of global Internet traffic, we have a responsibility to be a part of the solution.

This was the primary motivator around our release of a new protocol a year ago, called µTP. The protocol essentially senses congestion and self-regulates to avoid contributing to Internet traffic jams.

Because µTP can never induce network congestion, it doesn’t contribute to an ISP’s cost. An ISP still has regular network maintenance expenses, but remember, with a fixed-cost network, traffic only becomes an economic burden if it contributes to congestion and forces the need for expansion.

As a result, µTP is exceedingly friendly to ISPs and their business model. µTP is open-source, and we invite application and cloud services providers to work with us directly or in the IETF’s LEDBAT working group in the ongoing innovation and usage.

Klinker

Some providers and their allied interest groups have disputed the diminished impact Klinker cites as a benefit of µTP, but in provider-world, the BitTorrent “problem” is rapidly becoming yesterday’s news anyway — online video is the new boogeyman.  NPD Research just released numbers showing peer-to-peer use has dropped from 16 percent of all U.S. Internet users to 9 percent over the last three years.

After making a spirited sales pitch for what he hopes will represent peer-to-peer 2.0, Klinker surrenders on behalf of everyone else, arguing the solution to America’s ‘broadband crisis’ is speed throttles during peak usage periods, and time of day pricing.  Klinker suggests broadband users might need to plan their “on-demand” viewing well ahead, or face the kind of “congestion pricing” Londoners face if they attempt a journey by car into the city center at high noon.  Klinker suggests Netflix customers should pre-schedule downloads of their movies the night before watching them, or else pay a fee for instant gratification.

That assumes, of course, you know what you want to watch the day before you do, that you can download Netflix content (you cannot), and that you didn’t remember you could accomplish the same thing if Netflix shipped the DVD out to you by U.S. Mail.

Are broadband rationing coupons far behind?

Klinker’s willingness to submit his own company’s peer to peer technology to provider speed throttles is likely to earn him a dressing down by investors wondering what the future holds for a protocol that can be dosed with Xanax at provider will.  Handing over the power to make your file sharing technology painfully slow and frustrating is likely not going to win new converts, either.

Before willing to subject everyone to solutions for broadband providers’ scary predictions of a broadband exaflood, would it not be better to actually obtain verifiable evidence there is a congestion issue in the first place?

Mossberg

Walt Mossberg, a columnist for the Wall Street Journal, delivered some stinging remarks about how large telecom and media companies deliver broadband services and programming to North Americans.

“We really suck at broadband,” Mossberg complained during opening remarks at Beet.TV’s first executive summit held at the Embassy of Finland in Washington.  “We have terrible, terrible broadband.”

“The typical consumer either has been lured into broadband by a DSL service that in Finland would not count as broadband — 768kbps is not broadband,” Mossberg said.  “If [the government] adopted a regulation not allowing Verizon to call that crap broadband, it would help.”

Mossberg added that cable modem service in the US and Canada is so slow, it is the object of pity and pathos in countries like Japan and Korea, and we’re overcharged for it.

http://www.phillipdampier.com/video/Verizon Should Stop Calling DSL Broadband 2-17-11.flv

Mossberg’s comments come as part of a discussion about the online video revolution, which he says is being hampered by copyright controls, outdated advertising models, and broadband providers delivering sub-standard service.  (8 minutes)

Inner city Americans pay substantially more for broadband service than their neighbors in wealthy suburbs, while rural America pays the highest prices of all for broadband service, according to the results of a new study.

The Investigative Reporting Workshop at American University analyzed broadband speeds and service around the nation’s capital to learn how broadband is priced in different neighborhoods and communities.  The study covered the eighth largest metro area, which included over five million residents in the District of Columbia, Maryland, and Virginia.

Broadband providers never release specific data about their customers’ broadband service and the prices they pay for it, considering it a closely guarded business secret.  The Workshop went direct to consumers to get around this limitation, combining actual speed test results with the true cost of standalone broadband service reported by study participants.  It’s among only a handful of studies that rely on actual raw performance and pricing data — not company-provided general marketing information about speeds and pricing.

The conclusions expose a dramatic difference in broadband pricing depending on where one lives, what company they do business with, and how well each company’s network performs.

The results?  Broadband pricing was cheapest from Comcast, the region’s dominant cable company and most expensive, by far, from a wireless ISP (WISP) that serves the Culpepper, Virginia area.  Residents in wealthy suburbs in Fairfax County, Virginia and Montgomery County, Maryland enjoyed the best bang for their buck, charged nearly half the price-per-megabit that residents inside the urban District of Columbia pay.  Rural residents were stiffed with high prices for comparatively slow speed service.

Verizon, the area’s dominant phone company did poorly in the study, in part because of the substantial number of legacy DSL customers who are paying a lot for little speed.  Although Verizon’s fiber-optic FiOS service is making inroads in some parts of the study area, its high speeds don’t reach enough customers to offset Verizon’s larger base of DSL customers.

Here’s how Comcast and Verizon compared:

• Comcast, according to an average of 1,254 surveys, charged customers $5.76 per Mbps;
• Verizon, according to 1,744 surveys, charged $12.34 per Mbps — more than twice as much as Comcast.
• Verizon charged $50.86 per month on average.
• Comcast charged $52.68.
• The median, or midpoint price, is much lower, at $5.13 per Mbps for Verizon and $2.84 for Comcast.

Cox Communications, a cable company that serves Fairfax County and Fredericksburg in Northern Virginia, charges $6.60 per Mbps, according to 528 surveys. Cox’s monthly average cost was $46.77.

Rounding out the five regional providers, RCN Corp., averaged $11.06 per Mbps, or $48.57 per month, for a median price of $5.77 per Mbps, according to 126 surveys, and Clearwire Corp., according to 172 surveys, averaged $16.19 per Mbps for $42.16 per month and a median price of $12.47 per Mbps.

By far the worst values went to rural customers.  Overall, the study found rural residents pay $30.28 per Mbps (based on 431 surveys) and $53.84 per month for service, a per-megabit rate far higher than the other three regions.

Virginia Broadband LLC, a Culpeper, wireless broadband provider, offered the worst value. According to a summary of 24 surveys, the company charges a whopping $198.13 per Mbps, the most of any company that underwent more than one test. The average monthly bill was $94.07, and the average speed was less than a megabit per second.

Comcast, RCN, and Virginia Broadband did not respond or refused to comment.  Verizon said the results were unfair because it did not distinguish between FiOS fiber to the home customers and their traditional DSL service.

They also criticized the study’s price comparisons, which relied solely on standalone broadband service pricing.  Verizon, like most providers, discounts services to customers who choose to bundle their telecommunications products together.

The study arrives at the same time the federal government has released their own national broadband map, which relies to a large degree on information volunteered by broadband providers.

The study has been criticized for not accurately depicting true broadband speeds and pricing, which can distort the true picture of broadband availability across the United States.

The Canadian Radio-television and Telecommunications Commission

Thanks to quick work from the Canadian Radio-television and Telecommunications Commission (CRTC), Canadian broadband providers have wasted no time announcing new usage limits and penalties for those who exceed them.

The principal culprit for the Internet Overcharging: Bell (Canada), the nation’s largest telecommunications company.

Bell’s newly won right to charge wholesale customers usage-based billing rates has caused a collective groan from independent providers from Vancouver to Charlottetown. Primus, the second-largest alternative communications company in Canada, threw up its hands and announced it was going to pass Bell’s costs along to their customers.  Some other providers have already raised rates, shocking customers who received December bills with $100 in overlimit penalties.

“It’s an economic disincentive for Internet use,” said Matt Stein, vice-president of network services for Primus. “It’s not meant to recover costs. In fact these charges that Bell has levied are many, many, many times what it costs to actually deliver it.”

That is a hallmark example of what happens under Internet Overcharging schemes like “usage-based pricing,” usage caps, or other limited use plans.  Customers don’t pay for their actual broadband use — they overpay, especially when stiff penalties are imposed when they exceed their usage allowance.

“Canada’s broadband market is a racket, period,” says our reader Andy, who lives near Petawawa, in northern Ontario.  “If you are in a major city in the south, you can choose Bell or one of their lackeys or the cable company, which almost always means Shaw or Rogers in English-speaking Canada.”

Andy doesn’t have access to cable, so his broadband comes courtesy of DSL from the phone company.  He counts himself lucky he has that, even though it only delivers around 512kbps and is down at least once a week, especially when the weather is bad.  Other communities have no broadband at all, and some areas are so desperate for access, they have provided financial incentives to attract a provider to town.  It rarely succeeds.  Zeropaid reports a handful on unscrupulous would-be providers have taken the incentives and left town with no broadband service to show for it.

“These guys only want the easy customers and they’ve got them in Toronto or Ottawa,” Andy says. “The rest of us can live with dial-up.”

The Canadian government occasionally launches highly publicized demonstration projects to deliver rural broadband in northern Canada, often over wireless, something Andy scoffs at.

“When the TV cameras are shut off and [Prime Minister] Stephen Harper’s political bandwagon goes home, the networks last for about a month until something goes wrong and the whole thing shuts down, sometimes for weeks before someone repairs it,” Andy says.

There oughta be a law.

Katz

In fact Canada, a country with a reputation for keeping a regulatory eye on essential services, has an agency that is supposed to protect consumers and monitor telecommunications services. Unfortunately for Canadians, it was that agency that gave Bell the go-ahead to kill unlimited, flat rate broadband — the service that has kept most independent service providers in business.

Critics charge the Commission has been acting more like a Big Telecom industry trade group than an independent oversight body, and many independent providers openly wonder how long they’ll survive with Bell’s predatory pricing.

Reviewing who serves on the Commission may provide some answers about why they seem to be closely aligned with Canada’s largest telecom companies.  Many of the commissioners used to work for the very companies they are now asked to regulate, and some are likely to return to them after their stint at the CRTC.  The agency’s supposedly independent commissioners know if they want future employment in the telecommunications industry, it’s best not to antagonize your next boss.

Take Commissioner Leonard Katz.  He joined the CRTC in 2005 and was appointed vice chairman of telecommunications in 2007.  For 30 years before joining the Commission, Katz was employed by Canada’s largest telecom firm, moving up through Bell’s management ranks from 1974-1985.  His last big job at Bell was as the assistant director of Bell’s regulatory lobbying department, where he spent his energy and time dealing with federal politicians and the CRTC.  Katz also loves Canada’s wireless industry, dominated by Rogers Communications.  He was founder and chairman of the Cellular Telecommunications Industry Association Clearinghouse for wireless carriers.

Arpin

Or there was Michel Arpin, a consummate former insider at some of Canada’s largest corporately-owned broadcast station groups like Astral Broadcasting, Mutual Broadcasting, and Radiomutuel.  He also had a side relationship with Telus, a western Canadian telecom company that also belongs to the Canadian Association of Broadcasters (CAB).  Arpin served CAB as vice-chair and chair. Arpin, the corporate media man, also served as the vice-chairman of the CRTC’s broadcast division until late last year.

Other examples:

• Rita Cugini — A regional commissioner for the province of Ontario, her professional background has been working for some of the province’s biggest media interests, including Alliance Atlantis, Telelatino, and CFMT/OMNI.  She also is integrally involved with the Canadian Association of Broadcasters, which bends the ears of regulators regularly on a variety of matters;
• Tim Denton — About as close to the broadband industry as you can get, Denton’s role as a commissioner began in 2008, but his money was made working for the broadband industry, including the Canadian Association of Internet Providers, which lobbies for big broadband provider interests.
• Candice Molnar — Serves today as regional commissioner for Manitoba and Saskatchewan, but she knows most of the prairie provinces’ movers and shakers by name, having spent more than 20 years at SaskTel, Saskatchewan’s biggest phone company.  She helped guide SaskTel from provincial to federal regulation when she worked there and her voting record shows her heart is still with her former employer.

Cugini

With a Commission stacked against ordinary Canadian consumers, it’s no wonder Internet Overcharging schemes and stifled broadband competition rule the day in Canada.

“Rural Canada always pays the biggest price,” says Andy.  “If it didn’t happen in Toronto or Ottawa, it didn’t happen at all.”

Andy complains Canadian broadband will never improve with Internet Overcharging schemes in place.

“They complain about your usage and say if they can restrict it, they can improve service to more people; well, where is my better service?” Andy asks.

“At least I don’t have to worry about their usage allowances… yet,” Andy says. “Even if I left my connection running continuously, at these speeds I doubt I could do much damage.”