A freak spring snowstorm has stolen CenturyLink’s thunder.

A freak spring snowstorm has covered up much of the anticipated publicity for CenturyLink’s plans to launch a trial of gigabit fiber broadband for 48,000 customers in western Omaha.

The phone company announced the pilot project this week amid a historic spring storm that dumped several inches of heavy, wet snow on parts of Nebraska. The media devoted most of its attention to the weather.

CenturyLink admits its gigabit fiber service is a pilot project designed to test consumer demand and the tolerance of local officials for limiting upgrades to selected neighborhoods and customers most likely to buy the service. CenturyLink has priced the gigabit service comparably to Google Fiber — $79.95 a month if bundled with other CenturyLink products. Standalone broadband is nearly twice as expensive — $149.95 a month.

“CenturyLink is pleased to offer its Omaha customers ultra-fast broadband speeds up to 1Gbps to help keep pace with growing broadband demands,” said Karen Puckett, chief operating officer. “This demonstrates our commitment to deliver communications solutions that provide our customers with the technology they need to enhance their quality of life, now and into the future.”

CenturyLink will not be building the fiber network from scratch. The company already runs a 100Gbps middle-mile/institutional fiber network in Omaha that reaches certain business clients and serves as a conduit for CenturyLink customer traffic. CenturyLink will supplement that by using the remnants of its predecessor’s long-gone Qwest Choice TV service. The company will spend millions to run fiber connections to homes and businesses, but around 9,800 residents formerly served by Qwest’s television service will be able to sign up for CenturyLink Lightspeed Broadband as early as Monday. Others may have to wait until as late as October.

CenturyLink now sells up to 40Mbps speeds in Omaha, with a 300GB monthly usage cap. The company has not said if it intends to apply a usage limit on its fiber customers.

The phone company’s largest and fastest competitor is Cox Cable, which sells up to 150/20Mbps service for $99.99 a month.

Cox Cable cannot match CenturyLink’s speeds at the moment, but does not think most Omaha residents need or want gigabit fiber.

“It is important to note that our most popular Internet package remains the one that provides speeds of 25Mbps, which meets the needs of the majority of customers,” said Cox spokesman Todd Smith. “We will continue to talk with our customers and invest in product enhancements to provide an optimal broadband experience.”

Only around 12% of metropolitan Omaha will have access to the experimental fiber service, primarily those living in West Omaha. The network will bypass residents that live further east. The boundaries of the forthcoming fiber network are notable: West Omaha comprises mostly affluent middle and upper class professionals and is one of the wealthiest areas in the metropolitan region. Winning a right to offer service on a limited basis within Omaha is an important consideration for telecom companies like CenturyLink.

AT&T, Verizon, CenturyLink and other telecommunications companies are seeking deregulation that would end universal service mandates that require companies to build their networks in every neighborhood, rich and poor.

Cable and telephone companies have taken careful note Google Fiber is being allowed to provide service only where demand can be found — a significant change in long-standing municipal policies that demand cable and phone companies provide access to nearly every resident.

CenturyLink delivered a “between the lines” message to local officials when it suggested it might expand its fiber network elsewhere in Omaha and beyond, but only after evaluating the project for “positive community support, competitive parity in the marketplace and the ability to earn a reasonable return on its investment.”

In other words, keeping zoning and permit battles (and residential complaints about construction projects) to a bare minimum, allowing the company the right to choose where it will (and won’t) deploy service, and making sure people will actually buy the service are all the key factors for fiber expansion.

AT&T said much the same thing when it vaguely promised a gigabit fiber network to compete with Google in Austin.

Google may have unintentionally handed their competitors a new carrot: deregulate us in return for fancy fiber upgrades that customers crave.

In perspective: CenturyLink’s fiber trial will only impact about 12% of the total population of metropolitan Omaha, primarily in and near affluent West Omaha.

WOWT in Omaha spent less than a minute reporting on CenturyLink’s forthcoming gigabit fiber trial. A spring snowstorm preoccupied most of Omaha’s media instead.  (1 minute)

Other stories of interest:

1. Breaking News: Provo, Utah the Next City Slated for Gigabit Google Fiber
2. AT&T Announces Its Own “Gigabit Fiber Network” for Austin; Details Leave Wiggle Room
3. Time Warner Cable, Verizon Insist You Don’t Want or Need Gigabit Broadband
4. AT&T, Time Warner Cable Claim They Are Ready for Google Fiber in Austin
5. Back to Kansas City: Google Fiber Now Going in the Ground; TV Service Also Announced

Frontier’s new mascot

I’m sure more than a few readers work for a company with a marketing department that churns out advertising and imagery that leaves you shaking your head wondering what they were thinking.

There are some employees at Frontier Communications who are head-scratching this week as the company unleashes “Frontier’s First Ever Spokesman.”

His name is Francis Abraham Buffalo (his friends get to call him “Frank.”) He’s a… buffalo.

An internal memo obtained by Stop the Cap! informs employees Frank is prepared to bulldoze his way through “the clutter and get consumers buzzing.”

“Think of the Aflac duck and the Geico gecko,” a Frontier executive writes. “People have a truly positive association with them that translates into a positive feeling for those companies.”

But can a new mascot really change perceptions about a company more than the quality of the products or services a company provides (or doesn’t)?

For the record, your editor has never been particularly moved by either the duck or the gecko, and I, along with many other Americans, stopped watching television commercials years ago with the advent of the DVR. I have also never bought a product or service based on anything other than its merits and price. Frontier’s buffalo will not change that.

The mascot search involved a nationwide focus group of at least 800 customers and non-customers who were shown a series of “try-outs” involving lip-synched ducks, pigs, and various other creatures you may have last encountered as roadkill.

“Frank was the top choice, lifting our preference rating over the competition by 8 points and decreasing the competition by 3 points.  That’s a net 11 point increase for Frontier and solid support that we’re on the right path,” the company trumpets.

Of course, their cable competitors can always suggest while Frontier is busy playing with animals, they are delivering far faster broadband service and a better package of phone, broadband, and television service that does not involve a third-party satellite dish stuck on your roof.

Even some Frontier employees were less than enthusiastic about the endeavor, already predicting the response ads from the competition.

“I thought the pig would’ve been a better choice,” writes one. “I can just see the competition running ads about not getting ‘Buffaloed’ by Frontier!”

Most of the excitement among employees seems to emanate from the office that envisioned the campaign and spent a lot of money to make it happen.

“A landmark decision in the continuing evolution of Frontier,” jokes a Frontier worker less than thrilled with the result.

Even Frontier executives admit that Frank might be a big, fat target:

“We have also heard some concerns from our employees that we are proactively addressing in the campaign so our competitors won’t take advantage of our new brand spokesperson.”

“Frank will be a boffo buffalo. A solid, truth-talking machine that doesn’t like fuss or tricks - and neither do we.   We play it straight — price guarantees and no contracts make it easy for consumers to understand our products and services.  So if anyone asks, Frank is not here to “buffalo” or trick anyone (call Cable if you want that!).  He doesn’t deal with BS or malarkey, and that means no hidden fees, no surprises.”

Phillip “It’s actually an American bison” Dampier

Frontier is asking for advice on how to make Frank a better buffalo and offer any additional feedback. At Stop the Cap! we are always willing to help, so we publicly offer advice for our hometown phone company.

1. The American buffalo is actually the American bison, but that probably sounds too French (it is actually Greek, but nobody wants to get too close to Greece these days). The bison’s story is remarkably similar to phone companies like Frontier. It once roamed across the American landscape in great herds but was targeted to near extinction. Just like your landline. It still maintains “near threatened” status, and is only gradually making a comeback with the help of conservation efforts. While our ancestors shared their lives with the bison, most people today will only meet one in a zoo or park. We are unsure why Frontier would want to associate itself with an animal best known in the past and unlikely to be seen today.
2. Lip-synching animals (and babies) has become cliché. We were not too impressed with the voice talent Frontier decided to use for their animals either. Instead, check out Telus, western Canada’s biggest phone company. They turn animal wrangling into an art form, using various critters in their ads for phone, broadband, and wireless service. Telus compliments their animal friends with Canadian musicians to visually and musically deliver whatever message the company wants to share.
3. While Frontier may have eliminated some of its old tricks like contract termination, equipment, service protection, and surcharge fees from customer bills, many of us have long memories of the surprise steep cancellation fees charged when dropping landline service that we kept for 20+ years. Others found Frontier’s inadequate DSL only slightly less annoying than the $100+ service termination fee thrown on the last bill. Some of those fees are still being charged to customers, including a particularly silly broadband account service order charge that still stings departing customers. It is hard to accept Frontier’s new marketing messages when the company is still baiting the traps.
4. Frontier’s reputation problem does not come from poor advertising. It comes from a poor selection of products and services. Frontier until recently has simply refused to keep up with the reality of today’s broadband market. Sorry, basic DSL will no longer cut it, particularly when a competitor arrives. Cable can still out-class Frontier’s broadband products even after upgrades to ADSL2+ and VDSL. Frontier bills are still loaded with surprise surcharges and extras that raise the out-the-door price, sometimes even higher than what cable charges. The more important question to ask focus groups is why people do business with Frontier. Is it because they have to or they want to?

Frontier still does not evoke “cutting edge” anything. Frontier FiOS, inherited from Verizon, is the child nobody wants to talk about.

For years, Frontier only offered ADSL at speeds that stopped keeping up with cable a decade ago, even in large metro areas like Rochester, N.Y. When the company advertised “up to” in association with broadband speeds, it meant it: advertise up to 12Mbps but deliver service as slow as 3.1Mbps. With VDSL, 25Mbps might be doable, but cable already offers 30/5 or 50/5Mbps that is a sure thing.

Frontier’s landline service is generally reliable and works even with a power outage if you have a wired phone. But the company charges too much for a phone line many people are now jettisoning in favor of their cell phone and the company is still pushing long distance calling plan bundles that are now irrelevant. Does anyone under 35 know what a toll-call is?

Frontier’s “television” service for most customers is a third-party reseller agreement with a satellite provider with its own contract and conditions. Exciting? Not exactly.

There isn’t much to see here. AT&T and Verizon have spent money to earn money. The only major success story from AT&T’s landline business is its U-verse platform. Verizon FiOS delivers the most formidable competition cable operators like Time Warner Cable and Cablevision have seen. Even CenturyLink has invested in Prism, a fiber to the neighborhood system that can deliver a true triple-play package of services that give customers a reason to stay.

Frontier has Frank the Buffalo and some long-overdue technology upgrades that probably won’t win back a lot of customers.

So what are the strengths Frontier can sell?

1. In most markets, Frontier has no hard limit on broadband usage. That is an attractive selling point where cable operators slap usage caps on customers. Usage caps can and do trigger customer defections;
2. Frontier phone service is generally more reliable than cable or Voice over IP. Talk to customers in storm-struck areas who lost power and cable, but their phone line kept on working;
3. Frontier ADSL2+ and VDSL can outperform rural cable operators who have either oversold their shared network or don’t offer higher DOCSIS 3 speeds yet;
4. Frontier Wi-Fi, if vastly expanded, can be a useful free add-on and selling tool in areas served by cable operators that do not offer the service. But Frontier Wi-Fi hotpots have to be more commonly encountered to make a difference.

Above all, Frontier must keep upgrading its network to stay competitive. Once you lose customers, they can be extremely hard to get back. For many of us, establishing an account with the phone company meant significant installation fees and several days before a crew would turn up to connect service. Frontier knows perfectly well going back to the phone company after leaving is a high hurdle many never attempt.

The best mascot a company like Frontier can adopt are real customers and employees talking about their satisfaction with the changes Frontier is making. Without that, the customers that left will probably always think of Frontier as yesterday’s news. Using an American buffalo that neared extinction itself is probably not going to change that perception.

Here are Frontier’s animal mascot tryouts. (1 minute)

Other stories of interest:

1. Upstate New York Broadband Rankings Out: Rochester Ranks Last in Speed and Value
2. Charter’s Latest Bill Padder: The $3 ‘Change of Service Computerized (Junk) Fee’
3. FiOS TV Rate Hike in Indiana: “It’s Not Just a Price Increase, It’s an Offer,” Says Frontier Exec
4. Frontier Settles Oregon Class Action Lawsuit Over Unjust FiOS Video Late Fees; Refunds Coming
5. Frontier’s Mess of a 4th Quarter: Dividend Slashing, Underwhelming Broadband Don’t Impress

After more than a year of aggressive promotions for new customers and those threatening to switch to a competitor, Time Warner Cable has pulled back to boost revenue and make greater profits.

CEO Glenn Britt told Wall Street investors on this morning’s quarterly results conference call that the cable operator is moving in a different direction.

“It’s based on a simple premise: sell people what they want and what they can afford in the first place,” Britt said.

In February, Stop the Cap! noted that Time Warner Cable’s new customer promotions had dramatically changed for the worse. The package prices remained the same — around $80 for a double-play or $89-99 for a triple-play package of cable, broadband, and/or phone service, but customers received a lot less for their money. For example, last year’s promotions bundled Standard/Turbo Service broadband (10-15Mbps) with most offers. Starting this year, only 3Mbps Internet is included. Equipment fees are still extra, but more costly than ever – $8.99 a month for a traditional set-top box, $21.94 a month for a DVR-equipped box and service.

Robert Marcus, Time Warner Cable’s chief operating officer now admits it was all part of the plan, and the company now earns 15-20% more from customers subscribing to the less-aggressive new customer promotions.

“In January we implemented a new pricing and packaging architecture that’s designed to drive greater [new customer revenue] and profit,” Marcus told investors. “We still advertise the same beacon prices, but the product packages are leaner, with lower speeds and fewer channels and features. Once our beacon offers get the phone to ring, our inbound sales reps are trained to help customers select options that are important to them, like faster broadband or a DVR. As a result, customers are up-sold into packages that better meet their needs.”

This year’s promotions largely only bundle 3Mbps broadband instead of the standard 10-15Mbps bundled last year.

Marcus admitted the trade-off is customers shopping around for the best deal who read the fine print are likely to consider an offer from a competitor more closely. Others are disconnecting service when their promotion expires.

Marcus

“By and large, when were talking about triple play disconnects, they are going to our telco competitors,” Marcus said. “When we’re talking about single-play video disconnects, they, by and large, leave us for satellite. We’re increasingly finding that phone customers are dropping landline phone for wireless-only, and there are video customers who are leaving — and broadband customers for that matter, who are leaving the category, and that’s probably more of an affordability issue than anything else.”

Verizon FiOS is Time Warner’s most dangerous competitor because it beats the cable operator on broadband speed and promotional pricing. Time Warner faces some of the highest disconnect numbers in FiOS areas. AT&T U-verse is also having a greater impact because AT&T recently decreased the price of both their triple and double-play promotions and has increased broadband speeds in some areas, Marcus reported.

Marcus said Time Warner is handling the subscriber churn fine, and the cable company now cares more about higher revenue and profits than attracting deal-hunters who shop on price.

“Last year’s aggressive triple play offers drove significant connect volume, which led to the highest quarterly subscriber net adds we’ve had over the last several years,” Marcus said. “But in large part, we were attracting discount seekers who are more likely to [switch after the promotion ended]. In many cases, we caused customers who didn’t need or want phone to take a triple play offer just to get the low triple play rates.”

What new customers Time Warner did attract largely took one or two products from the cable company, usually cable television and broadband. New phone service customers have declined year-over-year as a result of less attractive pricing. Instead, Marcus noted customers are spending on incremental broadband speed upgrades, which cost Time Warner much less than delivering phone service.

Nobody needs 1Gbps, argues Britt.

With the looming threat of Google Fiber in both Kansas City and Austin, Britt seemed generally unconcerned about the impact the gigabit broadband provider would have.

“At the end of the day, what we’re doing is not any different than an overbuilder, and we’ve had overbuilders for the last several decades in this business so that’s what they appear to be doing,” Britt said. “They appear to be very aggressive on price. They’re even giving some tiers away essentially for free, and we’ll see where that goes. Despite the glow and all of that, the products are essentially the same others are offering today in a practical sense.”

Britt said gigabit speeds probably won’t have the impact many customers think they should because most websites are not built to deliver content at those speeds.

Marcus noted that in Kansas City, Google has only passed 4,000 homes so far, about 2,000 of which are Time Warner Cable customers.

“The number of defections we’ve seen is de minimis at this point,” Marcus said.

Both Britt and Marcus responded to a question about consumption billing saying nothing had changed in the company’s thinking about usage caps or charging for what customers consumed.

“We have in place in almost all of our footprint the option for people to pay less money if they wish to really consume less,” Britt said. “People who want to keep getting unlimited and pay for that, can do that. So we really don’t have anything new. It is in place in our whole footprint, I think, except one location.”

“The take rate on that offering has still been fairly modest, but we think it’s a very important principle that there’s a relationship between usage and the price that customers pay,” Marcus added.

Some other highlights:

• Time Warner Cable’s cloud-based set-top box guide is now testing in employee homes with plans to roll the new boxes out to subscribers later this year. Britt said these were the first of a new generation of all-IP boxes, which means if you have a device in your house that knows how to receive IP, you’ll get access directly via WiFi or through a cable technology called MoCA;
• Time Warner Cable will digitally encrypt its entire television lineup in New York City;
• Time Warner Cable’s recent restructuring cost 500 employees their jobs, mostly in finance, marketing and human resources.

Other stories of interest:

1. Time Warner Cable Loses 15% of Their Analog Cable Customers; News on Broadband Caps, Pricing
2. Time Warner Cable Will Increase Standard Broadband Speed to 15/1Mbps Nationwide
3. Big Cable Running Scared: Comcast/Time Warner Cable Promotions Can Save Customers A Fortune
4. Competition Breather: Verizon FiOS Rate Hikes Ease Pressure on Cablevision, TWC
5. Digging Deeper Into Time Warner Cable’s 2011 Results and What Is Coming in 2012

Japan has leapfrogged over Google’s revolutionary 1Gbps broadband service with twice the speed for roughly $20 less a month.

Sony-owned So-net Entertainment on Monday introduced its 2Gbps optical fiber GPON service called NURO, charging as little as $51 a month for 2/1Gbps service.

“Light NURO is reasonably priced, very high-speed fiber to the home broadband that delivers the world’s fastest speeds on technology usually reserved for commercial service,” the company said.

NURO is available in Tokyo and six Kantō region prefectures, including Kanagawa, Chiba, Saitama, Gunma, Tochigi, and Ibaraki.

Customers agreeing to a two-year contract get the best prices and a waiver (in certain circumstances) of installation fees as high as $540. Customers wishing to avoid a term contract can sign up for around $77 a month.

Customers are supplied a wireless router with support for speeds up to 450Mbps backwards-compatible with all Wi-Fi wireless devices.

NURO also offers landline telephone service over the fiber network for $5.38 a month. The charge for local calls is $0.09 for each three minutes. Calls to the United States are even cheaper: $0.08 for each three minutes. (There are no government-mandated surcharges on international calls, which account for the lower prices.) Calls to Voice Over IP lines, including other So-net customers are free. Softbank mobile phones can also be free of charge with an add-on plan.

So-net has been providing broadband service in Japan since 1996 and is an aggressive user of optical fiber technology. The company says its new speeds may be even too fast for current wired home LAN technology, but claims faster broadband speeds also enable customers to share multiple devices within the home with absolutely no speed reductions from the shared connection.

So-net serves a densely populated region of Japan that consists of mostly multi-dwelling apartment units and condos and closely packed single family homes. It is not unusual for many urban Japanese homes to have almost no yard, with square lots accommodating a vehicle, storage shed, and little else. Wiring these densely populated communities helped Japan accelerate fiber deployment with more customers served per square kilometer than in countries like the United States or Canada.

So-net’s advertising campaign for its NURO fiber to the home service is opaque by western standards, avoiding details about the product, and is strangely presented in English. (2 minutes)

Other stories of interest:

1. Bailiwick of Jersey Residents Getting 1Gbps Broadband; Private Providers Want Less
2. Singapore Extends Fiber to the Home Across the Country – 1Gbps “A National Priority”
3. London Gets 1Gbps Fiber Broadband for $79.80 a Month
4. Google Launching Free 5/1Mbps Internet, 1Gbps Service for $70 a Month in Kansas City
5. Virgin Media Doubling Broadband Speeds for Free While Competitor Sky Unveils 100Gbps Internet for UK

West Virginia’s broadband future is up for hot debate in the state legislature as Internet haves and have nots fight over whether the state should spend money to bring broadband to those lacking it or improve service for those that do.

House Bill 2979, a bill to expand the broadband purview of the West Virginia Infrastructure and Jobs Development Council, has turned into one of the most contentious bills before the legislature this term. An amendment to redefine what speeds represent “broadband” and requiring the council to prioritize efforts on unserved areas has sparked the most debate.

Sen. Robert Plymale (D-Cabell) introduced and won support for an amendment that would discard the current provider-favored standard defining a community as “served” if customers can buy at least 200kbps service. Plymale favors adopting the federal broadband speed standard — 4/1Mbps as the bare minimum. Plymale also wants the state to devote most of its resources to getting broadband to rural areas that do not have the service today.

“If you’re going to compete in this world today, you have to have access,” Plymale told lawmakers. “Access has to be the number one item, and this amendment allows access to be the priority.”

Plymale

But other lawmakers representing constituents in communities that already have broadband, but receive inadequate speed and service, objected to Plymale’s amendment.

Sen. Herb Snyder (D-Jefferson) claims Plymale’s amendment would restrict the council’s ability to manage broadband resources and require it to spend most of its funding on wiring smaller communities at the cost of service upgrades that could reach more people. Approximately 85,000 West Virginians still have no broadband access other than satellite.

“It’s entirely appropriate to use taxpayer dollars to help and assist people to get broadband service and get on the information superhighway rather than upgrading those already on it,” argued Sen. Mitch Carmichael (R-Jackson), who also happens to also be an employee of Frontier Communications.

Much of the state’s broadband infrastructure spending has been devoted to institutional and middle mile networks that consumers and small businesses cannot directly access. Spending on “last mile” infrastructure makes the difference between getting broadband service or being told it is unavailable.

But Sen. Snyder argues satellite broadband already offers access to the entire state, so broadband speed improvements were more important.

“As we speak the entirety of West Virginia is bathed in 5Mbps satellite broadband service,” Snyder said. “So we’re already surpassing that standard in the entire state, unless you’re in a cave where you can’t get the signal.”

Getting the best broadband bang for the buck was a priority for Sen. Clark Barnes (R-Randolph). He wanted to make sure any amendment would not prevent the council from spending money in areas where satellite service was available.

“If we have 10 folks up in Possum Hollow that have no access to broadband, would they receive priority over the thousand people who only have 2Mbps service?” he said.

The answer would seem to be yes under Plymale’s amendment.

Other stories of interest:

1. Frontier Stymies Broadband Grants to Independent ISPs; Complains They Duplicate Service
2. W.V. Does Broadband Mapping With Volunteers; No More Well-Connected Nation Money Flush
3. Frontier’s Wilderotter Claims W.V. Among Top-5 Broadband States; Facts Say Otherwise
4. West Virginia Upset With Current State of Broadband; Companies Losing Business Over Lack of Service
5. West Virginia’s Conundrum Proves Inflexible Broadband Grants, Poor Planning Wastes Taxpayer Money

AT&T suddenly announced it was ready to build its own gigabit fiber network in Austin.

AT&T and Time Warner Cable report they are ready to make more investments in their operations in Austin, Tex. to compete with Google Fiber when it arrives in the middle of next year.

Time Warner Cable says it already operates a multi-gigabit fiber optic network — one residential customers cannot easily access or afford. Residential broadband speeds at the cable operator top out at 50/5Mbps in Austin, at a cost higher than what Google plans to charge for 1,000/1,000Mbps service. AT&T’s U-verse network maxes out at 24/3Mbps, assuming customers have good copper wiring between AT&T’s fiber in the neighborhood and their home.

“The cable and phone company providers have purposely confused their networks’ maximum speed capacity with real end-user speeds for years, and when that fails to convince they simply claim customers don’t need or want those speeds anyway,” says Stop the Cap! reader and Austin resident Sam Knoll.

Knoll is enthusiastic about giving Time Warner Cable the boot, partly to pay them back for their aborted consumption billing trial attempted in Austin in 2009.

“I am not completely convinced Time Warner Cable understands just how much damage they did to their reputation when they pulled that stunt, and I’m certain they will attempt it again if they have a chance,” Knoll said. “The best thing customers can do is switch to a provider that believes usage caps and consumption billing are the fraudulent ripoff we know them to be. Google already knows this.”

Some Time Warner Cable customers in Austin never forgot the company tried to meter Internet usage in a failed experiment back in 2009. (Image: The Austinst)

Competition from deep-pocketed Google could eventually transform the broadband business model for American providers, assuming Google builds its fiber network in enough cities to challenge the conventional wisdom that prices have plenty of room to grow with faster Internet access. The more customers that sign up for Google’s already-super-fast broadband, the more providers will have to compete with better and faster service.

But AT&T is not convinced. The company announced yesterday it was prepared to build a gigabit fiber network not just in Austin, but also in surrounding Williamson County, with plenty of caveats.

“[We will only build the network if] the demand is there and if we get the same terms and conditions as Google received,” said AT&T spokeswoman Tracy King.

AT&T told the Austin American-Statesman the company wanted a faster regulatory approval process and permission to only build its faster fiber network in neighborhoods where there is proven demand for the service. Current franchise agreements often compel providers to offer service throughout the community and prohibits “cherry-picking” customers in high-income or low construction cost areas.

An AT&T official told KEYE-TV he had no idea how much AT&T would charge for gigabit broadband. Google charges $70 a month in Kansas City.

Austin has promised cooperation with Google, although it is not extending tax breaks or grants to the search engine giant. Google will get easy access to Austin Energy’s municipally owned infrastructure including utility poles and rights-of-way.

Google is speculated to be building showcase fiber networks to embarrass incumbent cable and phone providers who typically sell standard broadband service with speeds of 6-15Mbps in most larger communities. Rural areas are lucky to have 3Mbps service, and often much less.

But if Google intended to force major upgrades by cable and phone companies across the country, it might be disappointed with the response so far from AT&T and Time Warner Cable. Both companies indicate they will invest in and upgrade their networks to compete, but only in the service areas where Google-style competition exists. For the rest of the country, phone and cable companies are prepared to continue with the current “broadband scarcity” business model that delivers upgrades only occasionally, often accompanied by usage limits, consumption billing, and/or higher prices.

“Google has proved that there is a business model for selling abundant bandwidth as opposed to a business model for allocating scarce bandwidth,” said Blair Levin, a former chief of staff of the Federal Communications Commission.

“They are saying this is not an experiment. It is a business,” Levin told the newspaper. “In Kansas City, Google did the country an enormous favor. They said, give us regulatory flexibility to design the business and give us access to city property so we can build a network to lower the cost.”

KEYE in Austin talks with AT&T about their plans for a gigabit broadband network to compete with Google Fiber. The AT&T spokesman seemed more interested in pitching the company’s deregulation agenda and was short on specifics.  (3 minutes)

http://www.phillipdampier.com/video/KXAN Austin What competition will Google Fiber face 4-9-13.mp4

KXAN in Austin talked with Google competitors Time Warner Cable and AT&T about how they will respond to the Google Fiber challenge.   (3 minutes)

KVUE in Austin called Google’s entry into the city the opening salvo of ‘Fiber Wars,’ as AT&T promises its own gigabit network. Austin residents intend to take advantage of the competition to force providers to give them better deals to keep their business.  (3 minutes)

KXAN explains the possibilities of gigabit fiber, but also asks a former Google insider why the search engine is getting into the broadband business.  (5 minutes)

http://www.phillipdampier.com/video/KTBC Austin Time Warner Cable Responds to Google 4-9-13.mp4

KTBC was skeptical of AT&T’s sudden interest in gigabit broadband. “Gee, what a coincidence,” commented the anchor of Austin’s Fox affiliate.  (2 minutes)

Other stories of interest:

1. Austin Media Gushing for Google Fiber
2. AT&T Announces Its Own “Gigabit Fiber Network” for Austin; Details Leave Wiggle Room
3. Back to Kansas City: Google Fiber Now Going in the Ground; TV Service Also Announced
4. Multiple Sources Confirm Austin As Next Google Fiber City; Here Are Some Clues Why
5. AT&T and Time Warner Cable: ‘We Can Compete With Google Fiber’

On the heels of today’s announcement from Google that it intends to make Austin, Tex. the next home for Google Fiber, AT&T issued a press release claiming it was suddenly interested in building a gigabit fiber network in Austin too.

Today, AT&T announced that in conjunction with its previously announced Project VIP expansion of broadband access, it is prepared to build an advanced fiber optic infrastructure in Austin, Texas, capable of delivering speeds up to 1 gigabit per second.  AT&T’s expanded fiber plans in Austin anticipate it will be granted the same terms and conditions as Google on issues such as geographic scope of offerings, rights of way, permitting, state licenses and any investment incentives. This expanded investment is not expected to materially alter AT&T’s anticipated 2013 capital expenditures.

Currently, AT&T’s U-verse system in Austin — a fiber to the neighborhood system — cannot exceed 25Mbps as it is now configured. GigaOm’s Stacy Higginbotham reports AT&T told her it would build its own fiber to the premises system in Austin to support faster speeds.

But AT&T’s announcement does not come without plenty of wiggle room which could make today’s announcement little more than a publicity stunt:

1. AT&T claims it will build “infrastructure” capable of delivering “up to” 1Gbps. This could mean a network that supports a maximum of 1Gbps of shared Internet traffic, not 1Gbps to each home or business;
2. AT&T does not say it intends this network for residential customers, nor did it suggest a monthly price for gigabit service. Its Project VIP expansion describes planned broadband speed upgrades for residential U-verse customers of up to 75Mbps and for U-verse IPDSLAM to speeds of up to 45Mbps, not 1Gbps;
3. AT&T’s Project VIP already specifies fiber network build outs, but they are destined for cell towers, large business complexes, and multi-dwelling units that will share a fiber connection;
4. AT&T wants the same terms and conditions Google has received, including investment incentives. But AT&T could have applied for those incentives, and potentially could have already received them, if it specified plans for a gigabit network of its own. Instead, AT&T executives have always believed residential customers do not want or need gigabit broadband speeds. In fact, AT&T still doesn’t believe fiber to the home service makes economic sense, which is why it invested in a cheaper fiber to the neighborhood system that still relies on old copper wiring. AT&T also warns that, “Our potential capital investment will depend on the extent we can reach satisfactory agreements” with local officials on those incentives;
5. Wiring a city of Austin will cost tens of millions to reach every resident with service. Such an expense might be considered materially relevant to shareholders, requiring disclosure. Building a much lesser network, like a gigabit middle mile network or only offering fiber service to institutional or commercial customers would cost far less and could escape reporting requirements.

AT&T also did not miss an opportunity to promote its deregulatory agenda, which has so far not proved to be of much help to broadband speed enthusiasts stuck with DSL or U-verse.

“Most encouraging is the recognition by government officials that policies which eliminate unnecessary regulation, lower costs and speed infrastructure deployment, can be a meaningful catalyst to additional investment in advanced networks which drives employment and economic growth,” said Randall Stephenson, AT&T chairman and CEO.

AT&T’s agenda might result in a meaningful catalyst of a different kind — the end of rural landline telephone and broadband service.

Other stories of interest:

1. Austin Media Gushing for Google Fiber
2. Back to Kansas City: Google Fiber Now Going in the Ground; TV Service Also Announced
3. Bailiwick of Jersey Residents Getting 1Gbps Broadband; Private Providers Want Less
4. Multiple Sources Confirm Austin As Next Google Fiber City; Here Are Some Clues Why
5. Publicly Owned LUS Fiber Launching Gigabit Broadband for Lafayette, Louisiana

Phillip Dampier

The Wall Street Journal’s not-living-in-the-real-world editorial page strikes again.

The commentary pages have always been the weakest part of the Journal, primarily because they screech pro-corporate talking points in contrast to the more balanced reporting in the rest of the newspaper.

Mr. Holman W. Jenkins, Jr. decided to distort broadband reality (again) in yesterday’s edition with a glowing commentary on how wonderful broadband providers are in his piece, “Springtime for Broadband.” The only thing missing was a border in fine print labeled, “Sponsored by Verizon, AT&T, and your cable company.”

While your Internet bill is being hiked at the same time your provider is slapping usage limits on your connection, Jenkins dismisses consumer-fueled complaints about broadband price gouging, assaulting Net Neutrality, and overall poor customer service as part of Washington’s “broadband policy circus.”

Charges fly hourly that Google or some other company is guilty of gross insult to net neutrality (that sacred principle nobody can define). Oregon Sen. Ron Wyden has introduced legislation to regulate data caps and Internet pricing. Law professor Susan Crawford, until recently a White House technology adviser, clearly craves to be America’s next go-to talking head on broadband. Lately she’s been everywhere calling for a crackdown on the competing “monopolists” who supply Internet access.

How dare they complain, decries Jenkins in a robust defense of the 21st century version of the railway robber barons.

Comfortably playing patty cake with provider-fed talking points from the industry echo chamber, Jenkins is ready for battle, facts or not.

But wireless providers have invested big money to deploy high-speed mobile networks, and fixed and mobile are inevitably beginning to compete. The latest evidence: Australia recently predicted that up to 30% of households will go the all-wireless route and won’t be customers for its vaunted national broadband project.

Jenkins

Not exactly. The basis for this 30% figure is the National Broadband Network’s own business plan, which warns -if- the company raised prices to a maximum theoretical level, up to 30 percent of its customers would rely on wireless instead… by the year 2039. That is 26 years from now. You have nothing better to do in the meantime, right?

In fact, conservative critics of the fiber network, some defending the big wireless cell phone industry in Australia, have suggested fiber optics is a big waste of money because “wireless is the future.”

That old chestnut again.

“Now you can present a bulletin without touching a typewriter … it’s just there on the computer system, you don’t need a reel to reel tape recorder. I’ve got a touchscreen in front of me. Back then I had a big cartridge deck,” said Ray Hadley on 2GB radio. “Can you imagine the advances in technology in the next 26 years? I can’t. I can’t comprehend it. By the time they finish the NBN, it could be superseded by something we don’t even know about.”

NBN Myths, a website set up to tackle the disinformation campaign from political and industry opponents has one simple fact to convey: “Despite what you may have read from certain clueless commentators, there is not a single country or telecommunications company anywhere in the world that is attempting to replace fixed networks with wireless in urban areas, or even planning to do so in the future.”

Which would you rather have?

Even Telstra, the biggest telecom company in Australia scoffs at such a notion, noting a growing number of its customers have both wired and wireless service, and they do not depend on one over the other.

Research firm Telsyte found that 85 per cent of Australians want speeds of 50Mbps or higher, speeds impossible for wireless to offer. In fact, when the NBN fiber network became available to Australians, almost half the current users as of October last year had chosen an even-faster 100Mbps plan option. But Australians also want mobile broadband, and they are signing up for that as well.

The Australian Bureau of Statistics notes the number of mobile broadband Internet connections also grew by around 40% in Australia between 2009 and 2010. But here is the Achilles heel of wireless: it cannot deliver the same speeds or capacity, and providers charge high prices and deliver low usage caps. As a result, the wireless industry has pulled off a coup: they earn enormous revenues from networks they have successfully rationed. The total amount of data downloaded over Australia’s wireless networks actually fell on a per user basis, despite the growth in customers.

Much of Jenkins’ commentary is spoon-fed by the industry-funded Information Technology and Innovation Foundation, which produces industry-sponsored studies designed to tell America all is well in our broadband duopoly.

In the latest federal survey, the average broadband speed in America is up to 15.6 megabits per second, from 14.3 a year earlier. Nearly half of customers who six months ago made do with one megabit or less have now moved up to higher speeds. Since 2009, the U.S. has gone from 22nd fastest Internet to the eighth fastest.

The 15.6Mbps figure comes from the Federal Communications Commission. The statistics about our global speed ranking come from Akamai’s voluntary speed test program. Other studies rate America much lower. More importantly, while providers in the U.S. try to squeeze out more performance from their copper networks, other countries are laying speedier fiber networks that are destined to once again leapfrog over the United States. Most charge less for their broadband connections as well.

Jenkins also quotes the ITIF which touts 20 million miles of fiber were laid in America last year. But the ITIF, when pressed, will admit the majority of that fiber was “middle mile” connections, institutional or business network fiber you cannot access, or fiber to cell towers. Fiber to the home expansion has stalled, primarily because Verizon has suspended expansion of its FiOS network to new areas after Wall Street loudly complained about the cost.

Jenkins argues that if we leave providers alone and stop criticizing their growing prices, declining competition, and fat profits, the marketplace will suddenly decide to invest in network upgrades yet again.

“The day may come when even Verizon, which visibly soured on its $23 billion FiOS bet, rediscovers an urge to invest in fixed broadband infrastructure to meet growing consumer lust for hi-def services,” writes Jenkins.

Would Wall Street rather see providers invest in network upgrades or return profits to shareholders? Investment expansion in the broadband industry comes when a company senses if they do not spend the money, their business will be swept away by others that will. Cable broadband threatens telephone company DSL, so AT&T cherry-picked communities for investment in its half-measure U-verse fiber to the neighborhood network. Google Fiber, should it choose to expand, will be an even bigger threat to both cable and phone companies. Municipal fiber to the home networks upset the incumbent players so much, they spend millions of ratepayer dollars in efforts to legislate them out of existence.

Jenkins’ view that giving the industry carte blanche to do and charge as it pleases to stimulate a better broadband future is as fanciful as NBN critics in Australia suggesting fiber upgrades should be canceled in favor of waiting 20+ years for improved wireless to come along.

He even approves of Internet Overcharging schemes like usage caps and consumption billing, calling it proper price discrimination in a “fiercely competitive” environment to defray a network’s fixed costs.

Do you think there is fierce competition for your broadband dollar?

Broadband’s fixed costs are so low and predictable, it literally calls out consumption pricing as just the latest overreach for enhanced profits. As Suddenlink’s CEO himself admitted, the era of big expensive cable upgrades are over. Incremental upgrades are cheap, the costs to offer broadband are declining, so it is time to reap the profits.

Jenkins closes with one recommendation we can agree with: “A low-tech way to stir up broadband competition would be to relax the regulatory obstacles to the actual physical provision of broadband.”

We can start by scrapping all the state laws the industry lobbied to enact that prohibit community-owned broadband competition. If big cable and phone companies won’t provide communities with the quality of broadband service they need to compete for 21st century jobs, let those communities do it themselves.

Other stories of interest:

1. Wall Street Journal Nonsense: Canada Just Ahead of U.S. in Introducing Internet Overcharging
2. How Australia Will Shame North America: Fiber Speeds for Them, Overpriced, Slow Cable/DSL for You
3. Wall Street Encourages Verizon to Get Completely Out Of Landline/FiOS Business
4. Wall Street Journal Does Hit Piece on Australia’s National Broadband Plan — Hint, Hint to American Policymakers
5. We’re in the Broadband Shortage Business: Big Telecom Attacks Providers That Can Do Better

Virgin Media is in hot water with a UK advertising regulator after the company’s marketing department borrowed one of the tricks successfully employed in the United States: selling “unlimited broadband” service that actually is not unlimited at all.

Competitors BSkyB and BT jointly complained to the Advertising Standards Authority about misleading ad claims from Virgin Media that promise unlimited broadband, without bothering to clearly mention Virgin uses a “traffic management policy” that slashes speeds in half when a customer downloads more than 11GB during peak usage times.

Virgin defended its advertising, claiming its speed throttle is so infrequently activated that 97.7% of its customers would never encounter it.

But the ASA would have none of that, noting Virgin’s advertising campaign specifically targets customers who lust for faster speed and are engaged in bandwidth intensive activities.

The ad claim: “The faster your broadband speed, the more you’ll be able to do online. So, if there are a few of you at home gaming, downloading, streaming movies and shopping, then mega speeds of up to 100Mbps will let you all do your thing without slowing each other down.”

The tiny fine print.

“In that context we considered that the restriction of reducing users’ download speeds by 50% was not moderate and that any reference to it was likely to contradict, rather than clarify, the claims that the service was ‘unlimited’,” the ASA said. “We therefore concluded that the claim ‘unlimited’ was misleading.”

A Virgin spokesperson explained the “unlimited” in the advertising actually referred to one’s ability to use their account as often as they like without worrying about overlimit fees.

“Unlike BT or Sky, all Virgin Media customers can download as much as they like, safe in the knowledge we’ll never charge them more.”

The ASA itself is not militant adhering to the dictionary definition of “unlimited” either.

The ASA, which previously banned more than two dozen Virgin ads for stretching the truth, ruled this one misleading as well because Virgin Media crossed the line imposing restrictions “that were more than moderate:”

While the claim “no hidden charges” made clear that users would not be charged for downloading or browsing, we considered that the inclusion of the claims “unlimited” and “no caps” implied that there were no other restrictions to the service, regardless of how much data users downloaded and browsed. Virgin Media’s traffic management policy reduced users’ download speeds by 50% if they exceeded certain data thresholds and we considered that this was an immoderate restriction to the advertised “unlimited” service. We therefore concluded that the claim “Unlimited downloads Download and browse as much as you like with no caps and no hidden charges” misleadingly implied that there were no provider-imposed restrictions on a customer’s ability to download data.

“The problem is that the service claims to be unlimited but is too limited,” comments Stop the Cap! reader James, who almost thought this was an April Fools’ prank. “A little limited would be just fine. So if you claim your service is unlimited, consumers should expect it be subject to moderate limitations?”

Virgin has since slightly relaxed its speed throttle; violators now face a 40% speed cut when they are found to be downloading “too much” during peak usage periods.

For UK broadband users, the larger question is why the ASA simply didn’t reach for the dictionary when attempting to define “unlimited.”

“If a broadband provider wants to advertise unlimited service, they should simply offer it,” says Stop the Cap! reader Geoff Peale. “Calling it unlimited while interfering with your speed is nothing short of trickery, and the ASA should know better.”

The Advertising Standards Authority (ASA) has banned 25 Virgin Media adverts for being either misleading or factually incorrect in the past 18 months. The BBC’s Watchdog took a humorous look at them to find out why so many are falling afoul of the regulator. (6 minutes)

Thanks to readers James and Geoff for sharing the story.

Other stories of interest:

1. Virgin Media Doubling Broadband Speeds for Free While Competitor Sky Unveils 100Gbps Internet for UK
2. Welcome to Virgin Mobile’s Higher Calling: The 2.5GB/256kbps Usage Throttle Starts Friday
3. Virgin Mobile Tightens the Noose on Its ‘Unlimited Mobile Broadband’ With Even More Speed Throttles
4. Virgin Tests World’s Fastest Cable Broadband for UK: 1.5Gbps Beats Your 15Mbps Service
5. Virgin Mobile Gives Up on Unlimited Wireless Broadband: Will Adopt 5GB Cap Feb. 15

Scored first place again this year.

Consumer Reports has released its 2013 ratings for broadband service providers, showing independently owned cable companies and fiber optic broadband services from companies large and small deliver the best bang for the buck.

WOW, a small cable operator serving limited areas of the country yet again achieved first place in the ratings, appearing in the May issue. Verizon and Frontier’s FiOS fiber networks rated #2 and #5 respectively. (Frontier acquired its fiber to the home network from Verizon in 2009.)

In general, cable broadband service scored considerably better than telephone company DSL. Wireless broadband did more poorly, with Verizon’s 4G LTE network in 23rd place. Satellite scored worst, with both ViaSat and Hughes among the bottom three.

Verizon’s ongoing speed boosts assure the company of high ratings for its FiOS fiber network.

Mediacom once again took honors as America’s worst cable company. This year, it managed to score even worse than ViaSat, formerly WildBlue. Other bottom dwellers: FairPoint DSL, AT&T DSL, Frontier DSL, Charter Cable and Comcast Cable.

Compared with last year, few companies saw dramatic improvements or declines, despite glowing press releases touting improvements and investment.

Time Warner Cable, which scored 19th last year dropped to 20th place this year.

TDS, an independent phone company, managed a surprising 5th place score last year, despite only giving most of its customers DSL service. This year it is in eighth place.

Cablevision, which faced criticism for an overburdened broadband network last year managed almost no change in ratings this year, despite a measurable improvement in service.

Consumer Reports’ ratings are largely based on customer perceptions shared with the magazine in its annual questionnaire. CenturyLink may have delivered an improved experience for its customers between 2012 and 2013. Last year the phone company was in 18th place. This year it improved to 11th place.

Other stories of interest:

1. Consumer Reports Releases 2012 Top-Rated Telecom Providers, Quotes Stop the Cap!
2. Netflix January ISP Ratings: Google Fiber Tops, Verizon/AT&T DSL At Bottom
3. AT&T Scores Last (Again) in Consumer Reports’ Ratings; Oddly AT&T Reseller Scores Highest
4. A Look at Broadband Numbers in the United States: DSL Hurting Phone Companies
5. Customers Flee Frontier FiOS: Company Loses A Stunning 10,000 Customers in 3rd Quarter